MR. WILLIAMSON: It is 9:08 a.m.,and I would like to call the June
2006 meeting of the Texas Transportation Commission to order. It is
a pleasure to have each and every one of you here with us this
morning.

Please note for the record public notice of this meeting, containing
all items on the agenda, was filed with the Office of Secretary of
State at 11:37 a.m. on June 21, 2006.

As we always do, before we begin today's meeting, the commission
would appreciate it if each of you would join with us in reaching
into your pocket or your purse or your bag and removing your cell
phone, your pager, your PDA, your Dewberry, whatever you carry, and
putting it on the silent or vibrate mode so as not to disrupt our
proceedings during the day or tomorrow.

MR. JOHNSON: Excuse me?

(General laughter.)

MR. WILLIAMSON: I just wondered if anybody was listening, you know.

Thank you very much.

Our second custom is to open up our meetings with comments from each
commissioner, and we traditionally start with the commissioner
located furthest to the east, and so Mr. Houghton, followed by Ms.
Andrade, followed by Mr. Johnson. Have at it, Ted.

MR. HOUGHTON: My geography was off. Furthest and east I guess is Mr.
Johnson; Mr. Johnson said in this building.

Good morning to you all, and good morning to my fellow El Pasoans,
glad to have you here. We're going to have some fun today, going to
have a lot of new stuff -- when I say stuff, initiatives that will
be hopefully approved. But I welcome you all to a very historic day
that you may have been reading about in the local media.

MS. ANDRADE: I'd also like to echo Ted's comments and that is to
welcome you all, and this is a history-making day in Austin, and
certainly I have left San Antonio very happy with what's going to
occur today. But I also want to take a few minutes to thank my
fellow commissioner, Ted Houghton, for everything that he's done on
this project in making sure that we protect the assets of Texas. So
Ted, San Antonio thanks you.

And we've got many special guests today but we also have some
representatives from a group that's been working on public
transportation, on regional coordination, and Mr. Chairman, if it's
okay, I'd like to ask them to stand.

MR. WILLIAMSON: Please.

MS. ANDRADE: For all those that are involved in public
transportation for the next day and a half, would you please stand?

MR. WILLIAMSON: Thank you for your willingness to participate; we
appreciate it.

(Applause.)

MS. ANDRADE: Mr. Chairman, they've done a great job, they've
dedicated a lot of time and effort, and this group, as you know, is
led by Michael Morris and he's done a great job for us. Thank you
all very much.

MR. JOHNSON: I guess what I'm going to do is echo the echo. Pleasure
to see so many people here that it continues to amaze me how much of
what goes on in this state is dependent upon transportation, and
your keen interest in those affairs and your presence here, I think,
emphasize that to a great degree.

I'm sorry that I missed the social evening that our friends from the
Mountain Time Zone sponsored last night. I had a reception in
Houston that I couldn't leave until past eight o'clock, so I was
late getting here. I know I missed a blue ribbon, five star event,
and I apologize for it.

As my fellow commissioners have referred to, we have a very busy and
full agenda, a lot of very meaningful things are going to come
before the commission today, and I'm looking forward to the dialogue
that we'll have and continuing to accomplish a lot and making the
quality of life for all Texans better. Thank you.

MR. WILLIAMSON: Thank you, members. And let me remind everyone that
if you wish to address the commission today, we ask that you
complete a speaker's card which you can find at the registration
table to your immediate right in the lobby. If you're going to talk
about something that is on the agenda as posted, I ask that you fill
out a yellow card; if you're going to comment at the end of the
meeting in the general comment section, I ask that you fill out a
blue card.

But regardless of the color of the card, we would hope you would
restrict your remarks to the matter at hand and limit your time to
three minutes because we have a lot of people who wish to speak
today and we do have a long agenda. That restriction, of course,
does not apply to our friends from the legislature, and I know we
have at least two and perhaps more in the audience, and you may take
about as much time as you want.

MR. DILLON: Ric, I don't think it's very fair that the legislative
personnel should get more time than the people.

MR. WILLIAMSON: Thank you. I appreciate your comment.

Okay, Mike, I'll turn the meeting over to you.

MR. BEHRENS: Thank you, Chairman.

The first order of business, it's my pleasure to present a service
award, and the service award today goes to Chairman Ric Williamson,
who has five years now as a TxDOT employee and part of our
commission and leader of our commission, and speaking on behalf of
all TxDOT employees, we appreciate your service, all that you have
done, together with your fellow commissioners in the past five
years, and all the things that we will continue to accomplish as we
go forward. And your ideas, your innovations, your persistence, we
appreciate that, and we hope to add to this as years to come.

MR. WILLIAMSON: Some of my friends in the legislature would say my
hardheadedness.

(Applause.)

MR. WILLIAMSON: Well, thank you, Mike, and thank you, fellow
commissioners. I didn't know I was in for certification today, and I
appreciate that. I've had 20 years of public service and I love my
state, this is a great state. My grandparents came here from
Louisiana at a time when they couldn't get a job. My parents were
blue collar families who worked hard. The state gave me a great
public education, the University of Texas gave me a great university
education at a price that a blue collar family could afford, and 20
years is a small price to pay in return for that.

Thanks for this; I appreciate it very much.

MR. BEHRENS: Thank you.

Our next item of business will be a couple of resolutions, and the
first one will be we're going to recognize one of our invaluable
employees that chose to leave TxDOT. His last day will be tomorrow,
and so I'd like to ask our general counsel, Richard Monroe, to come
forward and we will make a presentation.

Richard, let me read this resolution from the commission. It says:

"Whereas, Richard Monroe has been the director of the Office of
General Counsel for the Texas Department of Transportation since
1998;

"And whereas, having first joined the department in 1989 as deputy
general counsel, he has demonstrated integrity and wit while
providing much needed and respected legal advice to the department
and to the Texas Transportation Commission;

"And whereas, he has proven himself a strong and able advocate for
various clients and employees in the private and public sectors over
three decades, most recently and faithfully with the Texas
Department of Transportation;

"And whereas, he has received his bachelor's degree in business
administration from Southern Methodist University in 1968 and his
doctor of jurisprudence in 1971 from Southern Methodist University
School of Law;

"And whereas, his intellect, experience and leadership proved
invaluable during the past two sessions of the Texas Legislature as
his office drafted monumental laws on toll roads, regional mobility
authorities, and comprehensive development agreements, thereby
building the legal foundation for infrastructure development in the
state for decades to come;

"Now, therefore, be it resolved that the Texas Transportation
Commission hereby honors and thanks Richard Monroe for his service
to TxDOT and to the people of Texas.

"With gratitude and best wishes, presented by the Texas
Transportation Commission this day, June 29, 2006." And signed by
all the members of the commission.

MR. WILLIAMSON: Mr. Houghton?

MR. HOUGHTON: I echo the chairman's remarks that we haven't approved
this yet, but I guess over our objection, your going to do it
anyway.

You've steered us a very steady course, very patiently, calmly have
said, No, back this way, and I appreciate that, Richard, and
congratulations to you.

MR. MONROE: Thank you.

MS. ANDRADE: Richard, I'm going to miss you. As I told you in the
elevator earlier, I look at you, when we're talking about this
agency, for guidance, and thank you for the great job that you've
done in protecting our agency. So good luck, and if there's ever
anything we can do for you, please let us know.

MR. MONROE: Thank you, Commissioner.

MR. JOHNSON: Well, Counselor, most of the times when you come
forward, the commission has probably veered off the path and headed
toward some legal trouble, and you're attention to that has been
greatly appreciated.

I marvel in our conversations that you left sort of the safety net
of being a corporate attorney in Midland, Texas to dedicate your
life to serving the state and this agency in such a remarkable way
and making sure that we dot the I's and cross the T's. It's been a
great pleasure and I'm genuinely going to miss you.

MR. MONROE: Thank you, sir.

MR. WILLIAMSON: Mr. Monroe, I hate to see you go, I hate to see you
go for a couple of reasons, one of which may be the most important
to me. We've dealt with some highly emotional and contentious issues
the last five years, and through it all you have conducted yourself
as a civilized man. I frequently like to remind myself and remind
whoever happens to be having to listen to me at the time that there
can be no higher compliment paid than to disagree civilly and to end
the day as a civilized man, and you have been the epitome of that
and it's been my great pleasure to have worked with you.

MR. MONROE: Thank you, sir. I truly appreciate all the kind words.

MR. WILLIAMSON: We'll miss you, Richard.

MR. MONROE: Thank you.

MR. WILLIAMSON: Let's take a picture.

(Pause for photographs.)

MR. BEHRENS: We have one additional resolution, and that resolution
commemorates today which is a very important day in the history of
transportation. Fifty years ago today, President Eisenhower signed a
bill authorizing the construction of the Interstate Highway System,
and I'd like to ask Randall Dillard to come forward and to give us a
brief presentation. Randall?

MR. DILLARD: Good morning, commissioners, Mr. Behrens. For the
record, my name is Randall Dillard, director of the Public
Information Office of TxDOT.

Today, June 29, 2006, marks the golden anniversary of what many
people say is the greatest public works project ever. It was a
project that changed America and touched virtually every aspect of
American life; it improved mobility, it improved safety, it improved
our economy; it brought Americans together.

Fifty years ago today, President Dwight Eisenhower signed the
Federal Aid Highway Act of 1956, establishing the Interstate Highway
System. I'm told that President Eisenhower signed the bill in a
hospital room without any ceremony.

Thirty-seven years earlier, as a lieutenant colonel, went on the
Army's first transcontinental motor convoy. On the 1919 trip between
San Francisco and Washington, D.C., he saw firsthand the poor
conditions of our nation's roadways. This slide shows some of the
pictures from that cross-country trip. If you notice below the
picture of the dirt road at the bottom right, Eisenhower wrote
"Lucky to get on a road like this."

Later, during his World War II stint as commander of the Allied
Forces, Eisenhower's admiration for Germany's Autobahn highway
network reinforced his belief that the United States needed first
class highways. He came to the conclusion that the U.S. highway
system was, in his words, inadequate locally and obsolete as a
national system.

As Eisenhower saw it, there were five consequences -- penalties is
the word he used -- of this obsolete system: the deaths and injuries
annually from crashes; the waste of money in traffic jams and
detours; inefficient transport of goods; the inadequacies to meet
defense demands; and the clogging of the nation's courts with
highway-related lawsuits. So Eisenhower, a Republican, worked with a
Democratic Congress to get legislation that resulted in the National
System of Interstate and Defense Highways, what we now call the
Interstate Highway System.

The country set out to build 41,000 miles of interstate at an
estimated cost of about $35 billion. A final cost estimate of nearly
$129 billion was issued in 1991. To build the nation's interstates,
Eisenhower brought together a system approach, a design concept, a
federal commitment, and a financing mechanism.

States were asked to submit designs for a standard route sign for
the interstate system. In 1957, a design by Texas Highway Department
traffic engineer Richard Oliver was selected as the winning entry
for the now familiar red, white and blue interstate shield.

Here's a quick look at some of the state's early interstates. This
first picture, taken in 1961, is of I-35 in Austin, this is at
Riverside Drive. Judging from the shadows, this picture was taken in
the late afternoon; it is not clear if it was rush hour traffic or
not.

(General laughter.)

MR. DILLARD: In 1963, this was the Stemmons Freeway in Dallas. I
count ten lanes, five in each direction; here is a rest area and it
looks like everyone's high school Oldsmobile Cutlass is parked there
on the left; and finally, here's a picture of I-35 in Waco taken
back in 1969.

Missouri and Kansas argue over who had the first state to build the
interstate. Missouri apparently had the first project to go to
construction, Kansas had the first paving project. We're Texas so we
don't really care. Texas has the most interstates today with 3,233
miles; that's almost 800 miles more than California, the state with
the second most interstates.

The interstate system was not planned and built without controversy.
Many property owners did not want to give up their land for a new
highway; some cities fought the interstates, others saw the system
as government folly, a colossal waste of tax money. Lyndon B.
Johnson heard from people who opposed the plan. In the early 1960s,
then Senator Johnson received a letter from Mrs. Maude Wilcox of San
Antonio. She was upset about the use of eminent domain to purchase
right of way, calling it unconstitutional, un-American, and
communistic. She went on to liken the right of way process to
everything from the Inquisition to the Salem Witch Trials, to the
Holocaust.

MR. WILLIAMSON: Sounds familiar.

(General laughter.)

MR. DILLARD: I don't know if we ever bought property from Mrs.
Wilcox, I'm sure if we did, we paid fair market value for it. But
the interstate system was built and the country has prospered.

I'm not sure who Nick Taylor is, but in 1990 he wrote: "The
interstates have knit us together in subtle and unanticipated ways.
Just as the railroad first introduced us to the country a century
ago, so the interstates have opened it to everyone. We are still
pioneers seeking horizons from the driver's seat."

Dwight Eisenhower summed up the importance of a quality
transportation system in America when he said, "Our unity as a
nation is sustained by free communication of thought and by easy
transportation of people and goods."

Today's anniversary provides us an opportunity to honor those that
built the Interstate Highway System, it gives us a time to reflect
on how the system can remain effective, and it gives us an
opportunity to plan for tomorrow's transportation needs. Today Texas
has a transportation problem, TxDOT has a plan. We're focused on
five goals: to reduce congestion, enhance safety, expand economic
opportunity, improve air quality, and increase the value of the
transportation assets. As we look to the future, we can learn from
the past.

To mark the significance of today's date in history, I am proud to
present you with a resolution for your consideration. The
resolution, I'll read it for you.

"Whereas, the Dwight D. Eisenhower National System of Interstate and
Defense Highways was established 50 years ago today on June 29,
1956;

"And whereas, there now exists more than 48,000 miles of interstate
highway in the nation's entirety;

"And whereas, Texas leads all states with interstate highways
covering 3,233 miles on 17 routes;

"And whereas, interstate highways have made travel safer, it being
estimated that since the inception of interstates in Texas, more
than 1.1 million injuries have been prevented and more than 18,000
lives have been saved;

"And whereas, the interstate highways through five decades have
propelled the sustained and bountiful growth of the Texas economy;

"Now, therefore, be it resolved that the Texas Transportation
Commission hereby observes and celebrates the 50th anniversary of
the United States Interstate Highway System and recognizes the
efforts and sacrifices of those men and women who earn our ceaseless
respect for their hard work and vision, including TxDOT employees,
private sector contractors and partners, elected officials,
citizens, and former commissioners, as today we praise those who
brought forth and maintain these vital highways that bind our nation
in union, that improve the lives of Texans, and that provide a
worthy model of the effectiveness and beauty sought in the
transportation systems by every person who hopes and works to make
real their dream of a prosperous future. With gratitude for the
achievements of the past and with the sure knowledge that the future
challenges us ever more today than in 1956, the Transportation
Commission, as a body, approves this resolution so made by the
signatures affixed below on this day, June 29, 2006."

MR. WILLIAMSON: And Randall, we have all affixed, we've all signed
the resolution.

MR. DILLARD: Thank you very much.

MR. WILLIAMSON: Thank you, Randall.

MR. DILLARD: Thank you.

MR. WILLIAMSON: Members, we are all having fun celebrating the 50th
year of the Interstate System.

MR. DILLON: I signed up to speak on that, about every point in that
speech, limit it to three minutes.

MR. WILLIAMSON: Well, we need to approve the minutes and formally
open the meeting, Jim. You'll have the opportunity to speak on
everything you wish to speak on.

MR. DILLON: Okay.

MR. WILLIAMSON: We need to approve the minutes, gentlemen and lady.

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries, minutes are approved. And Mike, I
would like to move item 12 to the beginning point to accommodate
some who have to leave unexpectedly.

MR. BEHRENS: Yes, sir, we can do that.

Item 12 is a rail project in Ellis County that we have been looking
at, and I'll ask Jim Randall to make that presentation, and then
we'll hear from the folks that wish to speak toward that item.

Item 12, this minute order directs the department to take no further
action at this time to acquire a 4.57-mile rail facility in
Waxahachie and Nena in Ellis County, known as the "Waxahachie
Industrial Lead."

Transportation Code Chapter 91 authorizes the department to acquire
abandoned rail facilities. Approving this type of acquisition
requires the commission to consider the local and regional economic
benefit realized from the disbursement of funds to acquire the rail
facility in comparison to the amount of the disbursement.

Pursuant to the legislation, the commission has adopted rules
prescribing policies and procedures for the department's acquisition
of abandoned rail facilities, and it's codified in 43 TAC, Section
7.20 to 7.22. Those rules require the department to request
documentation concerning the local and regional economic impact of
abandonment from a municipality, county, or rural rail
transportation district in which all or a segment of the rail
facility is located. The rules also require the department to
conduct one or more public hearings to receive public comment to
determine the need to acquire a rail facility.

The Union Pacific Railroad, UP, filed a notice of exemption on
November 17, 2005 with the Surface Transportation Board to abandon
and discontinue service along this rail line, as shown in Exhibit A
in your minute order packet. On January 11, 2006, the city filed a
late request for the issuance of a Notice of Interim Trail Use, or
NITU, for the subject line pursuant to the National Trail System
Act.

TxDOT conducted a public hearing in the city on June 6, 2006
regarding the acquisition of the line. Three people provided
comments at the hearing, one in support of the acquisition and two
against. A separate written comment was received supporting the
acquisition within the required time frame. A summary of public
comments is contained in Exhibit B to your minute order packet. No
comments received supported continued rail service but instead
focused on the acquisition of the facility as it relates to
preservation of the depot, tourism, trail development, and
commercial development.

The department has obtained information concerning the local and
regional economic impact of abandonment from UP and has determined,
based on this information and the information contained in the UP
notice, that there's only a limited need to preserve the rail
facility for future transportation purposes.

The City of Waxahachie has proposed an interim trail use and has
filed the necessary documents with the Surface Transportation Board.
If approved, the city would assume full financial and legal
responsibility for the corridor which would be subject to reversion
back to UP to operate as a railroad at such time as the UP deems
it's necessary to reactivate the line.

After evaluating the criteria prescribed in Section 7.22 of the
rules, and considering comments received at the public hearing,
staff has determined that acquisition of the rail facility should
not be authorized at this time. We recommend approval of this minute
order.

MR. WILLIAMSON: Members, we have three witnesses, and with your
indulgence, we'll hear from them first. Representative/Chairman Jim
Pitts. Welcome to our house, Mr. Pitts, a great supporter of
transportation.

MR. PITTS: Thank you, Mr. Chairman; thank you, commissioners.

First of all, I want to echo what Mike said, Mr. Chairman. Thank you
for your service to the State of Texas. You have been a wonderful
asset for Texas and Texans, and we may not always agree on
everything but I know your heart is in the right direction and
you're keeping Texas moving, and I appreciate that.

MR. WILLIAMSON: Thanks.

MR. PITTS: I'm going to be very short. I did bring my bodyguards
with me that I knew I had to have coming to TxDOT. Dennis Horak is a
landowner and Mark Singleton is president of Citizens National Bank
of Texas, who is very interested in the railroad remodeling and
reconstruction.

We would ask for you to accept the recommendation of your staff.
Thank you very much.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Thanks for being here.

MR. PITTS: Thank you.

MR. WILLIAMSON: Dennis?

MR. HORAK: He's made all the comments I need to make.

MR. WILLIAMSON: Okay. Mark?

MR. SINGLETON: As well.

MR. WILLIAMSON: Jim?

MR. DILLON: Banks have always been interested in railroads. The
robber barons of the 1800s were interested in railroads, that's how
they got filthy rich, monopolizing oil, meat packing, transportation
of goods, grain and services all across this country at a profit.
Similar to the interest the banks now have in bypassing all the
small towns in our country with these toll roads and freeways that
you're trying to build, the railroads could kill a town 150 years
ago by going around it, but if they were paid enough racket money
and extortion and ransom, then there might be a stop in your town.
So banks have historically been very interested in railroads.

This foreign-owned railroad that you are trying to push down the
people's throat --

MR. WILLIAMSON: Okay, Jim, the agenda item is not about that.

MR. DILLON: Oh, I thought he had referred to the banking interest in
the railroad.

MR. WILLIAMSON: This agenda item is about whether or not we will
acquire right of way from the Union Pacific that they're fixing to
abandon, this isn't about building a new one.

MR. DILLON: Well, what do we need the banker here for if it's a
giveaway, if it's free, as General Eisenhower originally intended
our roads to be free, that's why he called them freeways.

MR. WILLIAMSON: I think he was speaking as a property owner, not as
a banker.

MR. DILLON: Okay, all right. This reference to history being made
here today, I have a sneaky suspicion that it's going to be bad
history.

MR. WILLIAMSON: Okay, but that's not what this agenda item is.

MR. DILLON: Okay. State the agenda item one more time, please.
Railroad acquisition for free, that's going to be the only free
thing in this whole deal.

MR. WILLIAMSON: It's a rail project, Ellis County. The minute order
was whether or not we wanted to acquire it from the Union Pacific,
and what our staff has recommended is that we not acquire it.

MR. DILLON: Well, if it's free, why not take it?

MR. WILLIAMSON: Because we would have to spend money maintaining it,
we'd have to take your gasoline tax money and maintain it.

MR. DILLON: You're already stealing my gasoline tax money which is
earmarked and dedicated to the people's roads, the free roads and
being diverted.

MR. WILLIAMSON: Steal is a strong word.

MR. DILLON: Steal is a strong word.

MR. WILLIAMSON: I'm sure you don't intend it to be strong.

MR. DILLON: No, I don't intend it to be that strong, but if it fits,
then let's use it. The politicians are known for stealing, they've
earned that reputation.

MR. WILLIAMSON: Some people take that position.

MR. DILLON: I've seen it happen over and over. They steal the
people's money, they're stealing our roads, our means of
transportation, charging us to drive on the roads that we paid for,
throwing their exit and entrance ramps down on top of our freeways,
alleged freeways that have already been built so that they can have
easy access to more revenue with a ramp to get on and off the toll
roads.

MR. WILLIAMSON: That's not appropriate to the agenda item, Jim, and
your time is up.

Now, so the audience knows, we're going to move items as is
appropriate for our furthest away out-of-town guests to be able to
catch their planes to get home, however, at ten o'clock, whatever
we're doing we're going to stop and take up the matter of State
Highway 130, and a lot of you in this room will not have any
interest in that and that will be a good time to take a restroom
break or coffee break because we'll be tied up for about 15 minutes
taking care of that matter.

Having said that, Mike, I would just as soon proceed to item 2(a)
and get as much of our general business out of the way as we can.

MR. BEHRENS: Yes, sir, we'll do that.

Item 2 is discussion items, 2(a) is regarding our legislative agenda
and looking at recommendations that we are looking forward to take
to the next session, and item 2(b) then we'll be looking at our
Legislative Appropriations Request. Coby Chase will present 2(a).

MR. CHASE: Good morning. For the record, my name is Coby Chase and
I'm the director of TxDOT's Government and Business Enterprises
Division.

Today I will further discuss the formulation of the legislative
recommendations for the 80th session of the Texas Legislature. As I
state every single time after I introduce myself, it's been said
before, the Transportation Commission is authorized by law to make
recommendations to the Texas Legislature on statutory changes that
would improve the operation of the department. The purpose of this
ongoing dialogue is to make these issues public, and as I also say
every time, this is an open invitation to anybody within the sound
of my voice, either here or over the internet or whatever the case
may be, they may always contact my division and discuss any of these
issues in any detail or whatever the case may be. We'll be happy to
walk through whatever we're doing right at that minute with these
issues.

Last month I went through an exhaustive listing of statutory changes
that would improve department operations. I'll review those issues
now but feel free to stop me with any questions you might have.

As far as some of our business processes, we'd like to make it clear
in statute that we are not in the social service business when it
comes to providing medical transportation, but we are in the medical
transportation business. We'd also like the opportunity to share the
cost of purchasing billboards with cities when they do not allow us
to relocate billboards.

Now I will discuss issues we have previously mentioned related to
the agency's funding. The first is currently when the department
sells any surplus property, whether it is real property or surplus
equipment, the proceeds from that sale are deposited into the states
General Revenue Fund. These proceeds should be returned to the
Highway Fund. Then there is the continuing evolution in the 2003
change in the point of collection of motor fuels taxes. Distributors
of motor fuels are allowed to retain 2 percent of gross gas tax
receipts but the burden has been reduced and so should the
percentage they keep -- at least that's what our research is
indicating.

Now I'm going to discuss a measure designed to enhance the Texas
Mobility Fund. The department collects fees from the trucking
industry for General Revenue for oversized permits and motor carrier
registrations. Since these fees are directly related to
transportation, they should be re-evaluated, possibly increased, and
redirected to the Texas Mobility Fund.

We have one human resource related issue that we're looking at at
the moment. Numerous agencies have express authority pay unused
compensatory time to FLSA-exempt employees but TxDOT does not. We
should remedy that especially when we have to call them in to work
in emergencies, long hours, hurricane evacuations, whatever the case
may be, wildfire fighting.

Research on a safer temporary dealer tag continues. In addition, we
are studying the possibility of extending the renewal of dealers'
licenses to two years.

There are also several issues benefitting our project development
process. The first is to grant counties transportation planning
authority. This has been discussed, I hear this discussed more and
more, not in a scientific kind of polling way but the more I meet
with people and the more my staff meet with people, the more this
idea comes up. Counties should be able to require developers to set
aside lands for future transportation corridors. The second issue
would grant us authority to acquire rights of way from a willing
seller earlier in the process. And then third, we believe there is a
better method of procuring engineering services and recommend a
quality based, best value approach to obtaining this vital service.

In addition, we are studying the department's authority to enter
property for the purpose of conducting surveys and appraisals. We
are also researching what is required of state law in order for us
to fully implement the delegation of environmental review given to
us in the SAFETEA-LU pilot project.

Two issues on utilities need to be addressed: the costs we pay to
relocate them and the right they have to use the state's right of
way for free. As we optimize our assets, the policy on the utilities
should be revisited.

Although this is certainly a matter up for debate, there is perhaps
no more important issue before us this next session than seeking to
capitalize the Rail Relocation and Improvement Fund. We know rail
relocation is important but also know it is expensive. The state,
local communities and rail operators must come together to make this
happen. Revenue options are being studied in depth and will be
presented to you soon.

I'd like to report that I recently met with some folks from Morgan
Stanley. They're taking a lot of time to help us better frame the
issue and add some good perspective to our research. We greatly
appreciate their assistance on that.

MR. WILLIAMSON: Stop for a second, please.

Ted, in all of your ramblings through the mega-transportation
systems that you've been studying for the commission, have you come
across any states that levy any kind of flat fee -- I hate to use
the word toll but maybe that's the right word -- on either the
containers that come in on a railroad car or the railroad cars
themselves as they move through a state?

MR. HOUGHTON: Well, the one with the highest profile is the Alameda
Corridor where every container that hits the corridor has a fee
associated with it.

MR. WILLIAMSON: So if China, for example, loads a container full of
stereo components and puts it on a boat and brings it into the port
and a crane lifts it up and puts it on a railroad car and it gets
moved 15 miles, or however long the corridor is --

MR. HOUGHTON: Twenty-two miles.

MR. WILLIAMSON: -- the owner of the container or China or whoever
pays a fee for the use of that road.

MR. HOUGHTON: Correct. A toll railroad is what it is.

MR. WILLIAMSON: Is it like based on a percentage of value, weight,
flat fee?

MR. HOUGHTON: It's based upon the size of the container. A 20-foot
unit is $16. Coming back, every unit is $8.

MR. WILLIAMSON: So the rationale for the fee is to pay for that
corridor.

MR. HOUGHTON: That's correct, pay for the capital cost of building
that corridor.

MR. WILLIAMSON: And we don't want to frighten our business community
that's in the rail business, I'm just asking the question, Coby.
Have we dialogued with Kansas City Southern, UP and BNSF whether or
not they would be willing to support that approach for the Rail
Relocation Fund?

MR. CHASE: I don't believe my division has. My division will.

MR. WILLIAMSON: Well, we've got a standing memorandum of
understanding negotiated by the governor and former Commissioner
Nichols, a great commissioner of TxDOT and soon to be a good
senator, that assures the railroads that they will not be made to
pay for that which they do not wish to pay for, and I don't want to,
in spirit or in fact, violate that MOU, it's been very important to
us starting the dialogue and planning process with the railroads.

At the same time, the spirit of this discussion is to give fair
warning to our friends in the legislature, to the industry, to the
advocates of transportation, both sides of an issue, where we, the
commission, think the law ought to be. So I think in the spirit of
fair warning, maybe we ought to line up the railroad guys and gals
and see if they want to come in and start visiting a little bit
about that.

MR. CHASE: Absolutely.

MR. WILLIAMSON: With your permission, members? Let's do that.

MR. CHASE: Okay.

MR. WILLIAMSON: Please continue.

MR. CHASE: Enhancing safety on our highways is, of course,
tantamount to all other goals you have established for this agency.
Authorizing a system of sobriety checkpoints has proven to lower the
instances of drunken driving. These should be established in Texas
as well.

Another safety issue pertains to the possibility of authorizing the
department to implement a variable speed limit system to address
fluctuations in roadway conditions.

And then finally, in the way or recommendations regarding toll
roads, I've divided this discussion into two sub-categories:
comprehensive development agreements, and other toll road issues.

There are numerous issues regarding comprehensive development
agreements, or CDAs, that should be included in your recommendations
to the legislature, at least as we see them at this stage. These
include the repeal of the CDA sunset date and the statutory cap on
CDA-related expenditures. The 50-year cap on concession terms needs
to be lifted. TxDOT should be granted the authority to assume the
debt of a CDA developer and issue the bonds necessary to terminate a
comprehensive development agreement. We should be granted the
ability to deposit concession fees into the Mobility Fund. And then,
of course, the CDA process should be opened up to non-tolled highway
projects as well.

Other toll road related issues include granting the commission the
ability to acquire toll roads from other public entities and issue
debt for that purpose.

MR. WILLIAMSON: Another stop, please. Recently, in our discussion on
State Highway 121 with Denton, Collin, Tarrant and Dallas county
officials and officials representing the NTTA, it has come to our
attention that while we wish NTTA and HCTRA and CTRMA and perhaps El
Paso RMA, Alamo RMA to be in a position to compete head to head with
other public sector organizations and/or private sector
organizations, there may be some problem with them competing head to
head.

Is that a federal restriction that we cannot legally change, or is
that a state restriction -- maybe Amadeo needs to speak to this --
that needs to appear on our list? Or maybe Mike knows about it. Who
wants to speak to it?

MR. DILLON: (Speaking from audience.) I can tell you the federal
government has sole prerogative to control the borders and
[inaudible].

MR. WILLIAMSON: Okay. Well, when that became apparent, I think some
with the NTTA felt like they were being -- not intentionally -- cut
out of the deal. So I guess on our federal agenda which you'll start
talking to us about in the fall, we need to see if we can address
that.

What's probably going to happen over the next ten years is there's
going to be a growth of these regional authorities that will in turn
want to partner with the private sector and basically take us out of
the process. That being the case, we need to be sure those public
authorities, whether it's NTTA or something to be established later,
has standing to do those things where they can move forward with
their regional plans. So please remember that when the time comes.

In addition, we should be granted the ability to enforce the payment
of tolls through the denial of motor vehicle registration and
driver's license renewals. And one issue in particular I'm
interested in seeing evolve, seeing where the research takes us is
the notion that TxDOT create its own separate entity that can
compete in the CDA process. Our research section is digging into
that right now.

Since I last addressed you, the agency has been involved in two
public hearings with the legislature. On May 26, the administration
appeared before the House Appropriations General Governance
Subcommittee in which we provided testimony on transportation
challenges, the Enhancements Program, and the department's flight
services. And then on June 13, Chairman Williamson and the
administration testified before the Senate Transportation and
Homeland Security Committee and discussed comprehensive development
agreements and Trans-Texas Corridor 35.

In addition, I'd like to inform you that my staff has made several
presentations to transportation leaders around the state on the
subject of my presentation to you here today, in addition with some
federal matters as well. We are working to get your message out and
Texas is moving forward.

These are my prepared remarks for today and I'll be happy to take
any questions you might have.

MR. WILLIAMSON: Members, you've heard Coby's delivery and this is
the time in which you either ask him questions about what's on the
agenda now or you make suggestions to him about what you wish to be
researched to be added.

MS. ANDRADE: Mr. Chairman, I have a question.

Coby, for the benefit of the people here for public transportation,
could you just elaborate on the medical transportation, what you
said at the beginning, briefly?

MR. CHASE: Yes, I did kind of go through that quickly.

The issue at stake -- and if someone from my staff needs to correct
me, please do -- is we are in the business of providing
transportation services, not the full array of client services -- I
might have this wrong and in principle it's right -- and in two out
of three places it needs to be in law, it's in two places and I
think it needs to be in marbled more clearly into the Transportation
Code or another part of law so it clearly shows people what our
duties are and what our duties are not.

MS. ANDRADE: We're just in the business to provide public
transportation, not qualified.

MR. CHASE: Yes, ma'am, that is precisely it.

MS. ANDRADE: And the second thing is that I want to make sure that
they understand that we will still have time with our
recommendations as to what we want to incorporate in our agenda.

MR. CHASE: Absolutely.

MS. ANDRADE: Because they're doing a lot of work and we want to make
sure we're included.

MR. CHASE: I will say the first person to show up at our office to
take us up on this offer was Ben Herr, and he'll always have a place
in GBE in our heart for that one, and we're having a great time
talking matters over with him.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Thank you, Coby. We're not going to take up James at
this time.

Jim, have you got comments?

MR. DILLON: Yes, I sure do.

The creation of these so-called regional entities which will
supersede our local control of our lives is unconstitutional. Also,
unconstitutional is the abdication of all authority to impose fees,
duties, tariffs on interstate commerce. That's the sole prerogative
of the federal government, although now everything is federal since
the state has surrendered its sovereignty and the freedom of the
people to the federal goliath/leviathan in Washington, D.C. that now
controls everything, including our roads.

But the fact that he said that fair market value is going to be paid
for everybody's land and new authorities are going to be created to
tax and control and monitor the people's movements, that's just not
going to cut it. See, Texas is a free state and we intend to remain
free, we intend to drive on free ways, our roads are going to be a
free way to travel because the right to travel -- or as you call it,
mobility -- has historically been not only a God-given right but a
natural right that the people have always possessed. Our freedom of
movement is sacrosanct.

We will not surrender to a regional, federal, state or Spanish-owned
entity our ability to move about without being held hostage, held
for ransom, required to pay exorbitant fees, fines, penalties,
duties, taxes and tariffs at every little toll booth you can
possibly erect on every road that exists in Texas today. We will not
put up with that, and I'm here to tell you that this is a
history-making day and it's not going to be a mystery as to what
kind of history you make today. You are working, unknowingly and
unwittingly, I'm sure, but you are working for the wrong side of
history here today.

There is a movement around the world called freedom and the people
in this country and this state are joining in that movement. It's a
grassroots, fundamental, basic instinct in the human heart to be
free, and that includes, but is not limited to, our right and our
freedoms to move about and travel from place to place as free men on
a daily basis without being penalized and taxed.

MR. WILLIAMSON: Thank you. We appreciate your comments.

MR. DILLON: Thank you.

MR. WILLIAMSON: There's no reason to take action on the item,
members. We are going to let James come back because at this time
we're going to take up, Mike, agenda item 4, closely followed by
agenda item 5(a), please.

MR. BEHRENS: That's correct. Item number 4 is going to concern toll
projects in Caldwell, Guadalupe and Travis counties, and would
recommend to the commission to exclude Segments 5 and 6 of State
Highway 130 from the Central Texas Turnpike System.

MR. BASS: Good morning. For the record, I'm James Bass, chief
financial officer at TxDOT.

As Mr. Behrens said, this item would define that Segments 5 and 6 of
State Highway 130 as being financially independent of the Central
Texas Turnpike System. The indenture for the Central Texas Turnpike
System assumes that any toll road owned by the commission will be a
part of that system unless designated otherwise by the commission.
This minute order provides such a designation and we would then
forward this to the trustee and on to the marketplace if you
approve. Staff recommends your approval.

Jim, this is a process matter. I think you want to speak on the
whole idea, and you'll get a chance to do that on the next one, so
if you don't mind, we'll pass this one and then we'll go to the next
one and you can offer your comments about the whole package.

MR. DILLON: Okay.

MR. WILLIAMSON: Thank you very much.

Members, what's your pleasure?

MR. HOUGHTON: So moved.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. WILLIAMSON: And now we'll hear 5(a) and then we'll take
testimony.

MR. BEHRENS: Agenda item number 5(a) concerns comprehensive
development agreements; 5(a) concerns Caldwell, Guadalupe and Travis
counties where we recommend the consideration to the commission to
authorize the department to execute a Facility Concession Agreement
for financing, development, design, construction, operation and
maintenance of Segments 5 and 6 of State Highway 130. Phil?

Commissioners, we have been very, very busy over the last several
months working on this opportunity, and as Commissioner Houghton
announced a couple of weeks ago, we have reached an agreement with
Cintra Zachry to deliver this project.

The minute order before you authorizes the executive director to
enter into this agreement and would agree to these business terms.
I'll say that the agreement is complex, like any contract of this
nature would be, so what staff has done is put together a 12 or 15
slide power point and I will try to take you through that
presentation.

Chairman, of course, if you or any of the other commissioners have a
question during this, feel free to interrupt. If I can't answer the
question, I have Amadeo and James and Jack Ingram, who were all
instrumental in developing this project, and I think between the
four of us we'll be able to answer your questions.

Just as a bit of background, the project, as everybody knows, we had
a long, arduous competition between three fine proposals back in the
'04-05 time frame. At your March '05 commission meeting, it was
determined that Cintra Zachry would be the best value to the state.
In fact, in that March commission meeting, March 11, we did execute
a strategic partnership with the Cintra Zachry group.

And I will say that certainly people had their own notions of what
that did or did not do. The reality is that agreement essentially
set the business terms, the relationship between TxDOT and Cintra
Zachry group throughout the length of this agreement. It talked a
little bit about the process that we'll follow as we develop
individual projects all up and down the corridor, both road and
rail.

There was some discussion about that Cintra Zachry would have all
the work on this project and one of the provisions that they looked
at in that March 11 contract was this notion of this $400 million
right of first negotiation. Again, that was not guaranteeing Cintra
Zachry any work at all, it just provided an affirmative duty for us
to first discuss the project with the Cintra Zachry group.

MR. WILLIAMSON: So in other words, if Cintra Zachry said this piece,
this asset, this facility inside the corridor is ready for
development, the affirmative duty for us to permit to make their
case as to why they should build it.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: And then once we reach the $400 million threshold,
at that point we had no affirmative duty at all.

MR. RUSSELL: That's correct.

MR. WILLIAMSON: And that would have been available to either one of
the other two groups that were competing for the proposal.

MR. RUSSELL: Exactly, absolutely. It was in the original contract
documents.

MR. WILLIAMSON: And if we get past the $400 million threshold, and
if, for example, the county commission from Dallas County would come
to us and say we want you to consider a portion of Loop 9 in
southern Dallas County as a feeding facility or contributing
facility to TTC-35 and we want you to consider it for readiness to
build, we could do that.

MR. RUSSELL: Yes, sir, absolutely.

MR. WILLIAMSON: And it might even be Doug Pitcock and Carter Burgess
who ends up with the work.

MR. RUSSELL: Our choice, we would make that decision. And again,
even on your example, that first project we had no affirmative duty
to give any of that construction to anyone, merely an obligation to
visit with them, allow them to bring the idea to us.

MR. WILLIAMSON: And certainly if it wasn't self-performing, it's
highly unlikely that we would do it without going out and getting
some kind of competitive proposal -- self-performing meaning they
put up all the money and we don't have any of the risk.

MR. RUSSELL: Exactly.

And Chairman, you've really led into that next bullet point. As part
of that process, the Cintra Zachry group did bring to us an idea
that a project was ready for development. We agreed to that in
April, and that would be the extension of 130 south from essentially
Bergstrom down to Seguin.

And if I could, Chairman, I know there's some confusion about this,
that 130 is part of the Trans-Texas Corridor. That's not the case.
130 has been conceived for 20 years as an independent project to
relieve congestion in this area. On all of our comprehensive
development agreements, we always allow a certain amount of latitude
to these proposers, so whatever the project is, we always allow them
other projects that they may need for connectivity purposes or for
financing. All proposers always come in with other ideas.

In this case, the Cintra Zachry group said, Hey, the State Highway
130 project, don't know if it will be part of Trans-Texas Corridor,
you've achieved environmental clearance, we think it will be
important to develop that project, we think it's ripe to be
developed, and we agreed in April of last year.

MR. WILLIAMSON: And their rationale is the successful construction
of that asset will feed willing customers to TTC-35, if they so
choose.

MR. RUSSELL: Right.

MR. WILLIAMSON: So the state's interest here is not only in getting
a road built that it doesn't have the money to pay for to build
itself, but the state's interest is also in increasing the value of
what might be available on the parallel as it gets started.

MR. RUSSELL: Exactly. And again, as to the same issue -- not to
belabor the point -- we don't know whether State Highway 130 is
going to be part of the Trans-Texas Corridor, it could, but the
environmental process will determine whether it is or is not part of
the Trans-Texas Corridor. And to some extent, that's in response to
public comment we've heard on all of our public meetings. The
general public said, Please first look at existing assets first
before you look at a parallel or another facility. And clearly in
this case, State Highway 130 would be an existing asset, so it is in
response to those comments.

Just a little bit on the description. State Highway 130, again what
we call Segments 5 and 6, is about a 40-mile stretch from 183 there
in the Creedmoor area all the way down to I-10 east of Seguin. It
would marry up with the section of 130 that Bob Daigh is
constructing currently from Georgetown down to this section there on
183. We estimate it to be about a billion three, a billion three
five total construction cost. That would be construction, right of
way costs, design costs. We'd be looking at a 50-year lease after
it's open for traffic, and depending on any environmental issues,
that estimate would be about 2012 when it's open for traffic.

The overall goals, again, for the department: reduce congestion,
enhance safety, expand economic opportunity, improve air quality,
and increase the value of transportation assets. And I think, in our
opinion, commissioners, this project handles all five of those goals
and more.

Benefits to the state, some that we've looked at and quantified. We
would own a new asset, a $1.3 billion asset, a state highway, public
infrastructure that the State of Texas would own. Private
investment, as you pointed out earlier, it would be no cost to the
state, state or federal dollars, gas tax dollars. Preserve local
resources. Originally when State Highway 130 was envisioned, there
was a discussion with two of the counties, Guadalupe and Caldwell
counties, and to an extent Travis County, that they would be
providing a certain amount of the right of way cost, and of course,
all that now would be removed and it would allow them to use those
resources on other needed projects.

We constantly talk about going to bed at night and waking up in the
morning thinking of an $86 billion shortfall for the state, and
clearly this project would reduce that shortfall, and obviously
would attract more economic development to the region as well.

MR. WILLIAMSON: Let's explore that for just a moment.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: It reduces the shortfall in two ways, I think, but I
need for you to decide whether we agree on this or not. It relieves
from us the contingent liability of having to build a road at some
point in the future, part of our $86 billion.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: So that's a billion three that we reduce the $86
billion down to $85.7, in theory. But we also -- I think you're
going to tell us in a few minutes -- share in the revenue from day
one and we've conservatively projected that our share over 50 years
would be in the billion six range.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: So in a sense, we could feel, the commission, where
it could move forward with this, take the position that we've
reduced our $86 billion gap by $3 billion and we've now got an $83
billion gap.

MR. RUSSELL: That billion six is out over 50 years if you PV it.

MR. WILLIAMSON: But the $86 billion is also. When we developed the
gap, one of the things we focused on was what is it really over the
next 25 years.

Now, I'm kind of curious. Michael Morris, you're here? I thought he
was here. Is there anyone from Collin or Dallas or the NTTA or RTC
out there? We've been having a spirited discussion, Mr. Pickett,
about the 121 matter in North Texas, and I've had it said to me that
this is the most lucrative toll road in the state of Texas -- 121 I
speak of. If it's the case that 121, the subject of so much fun
discussions we're having, is the most lucrative toll road available
on the state system right now, and if it's the case that Segments 5
and 6 has a $3 billion value, then I'm kind of curious what is the
real value of the 121 toll road.

MR. MORRIS: Since we're approaching a competitive process on 121,
I'd like to speak in general terms.

MR. WILLIAMSON: Yes, sir.

MR. MORRIS: From the traffic and revenue studies done on 121 in
Denton and Collin counties, we think each of those is in excess of a
billion dollars, so the 121 project in Denton, since it will have
higher volumes as it approaches the airport, is anticipated to be
about $1.5 billion, the 121 Collin County piece is anticipated to be
a billion, and the 161 piece is anticipated to be a billion.

Now, with regard to 161, we still need $500 million to finish that
project. 121 Denton was pretty well funded with gasoline tax, small
amounts of money for technology with regard to reading toll tags,
and then $350 million or so is needed to complete 121 Collin, so if
you add that up, you're looking at a surplus of $2.2 billion of toll
revenue available to build other transportation projects, and we're
working through those MOUs at this particular time with this office.

I think it's quite possible, when CDAs or NTTA look closer at those
details and actually go through the competition beyond the traffic
and revenue and look at those further bandings that occur in what
are two high-growth counties, I think the revenue could be in excess
of that.

MR. WILLIAMSON: Thank you very much for your remarks.

And Phil, the reason I interrupted you and asked Michael --

MR. MORRIS: Michael Morris, MPO director, Dallas-Fort Worth.

MR. WILLIAMSON: -- the reason I asked Michael to comment because I
know Michael is deep into the analysis of this. It's been
interesting -- and I'm admittedly laying the groundwork for the El
Paso discussion in a moment that will occur -- it's human nature to
see the future through the prism of your past, and I can remember it
was just four short years ago when we could not persuade
organizations in parts of the state to build any of these toll roads
unless we agreed to front half the money with gasoline tax because
they couldn't possibly pay for themselves. In fact, we're looking at
one on the board right now.

Just two years ago, a contractor who had an opportunity, at our
option, to build this road told us that we needed to put $200
million of state gas tax money into this toll road, and yet we know
as business people who have been focused on this for a while -- not
because we like toll roads but because we have an $86 billion
problem and that problem has got to be addressed either with taxes
or tolls, one of the two -- we've known for a while that the numbers
are much different than we think they are looking at the future
through the prism of our past.

And it's refreshing for you to lay this out, and it's refreshing for
Michael to share with us some of his initial findings, and it's
instructive for all of us as we go through the day to kind of
remember that, because we've all got some difficult decisions to
make today that are really about how we finance the transportation
system in our future.

Please continue.

MR. RUSSELL: Chairman, just a couple of other points I'd like to
make on this slide, and you kind of touched upon it, I don't think
anybody ever doubted the need for this extension down to Seguin.
Commissioner Andrade has been very clear to us about the needs of
the Austin-San Antonio area, so it wasn't a matter of need or
importance, what it came down to, as you point out, was a lack of
gas tax dollars to finish the deal. And as I'm always talking about,
it's not that the department wouldn't have some money, but somebody
would have to give up needed projects in their area to complete
this. We'd have to essentially shift gas tax from somewhere,
Dallas-Fort Worth, Houston, El Paso, the Valley, Amarillo, and guess
what, nobody is willing to give up their projects because they have
so much need.

So it's difficult. I guess I always cringe when people say you would
have built this project anyway someday, but it wouldn't have been in
the near future, we simply didn't have the money for it.

The other thing I think is important to talk about that people miss
sometimes, even if and when we could fund the up-front project
costs, construction, design and right of way, the long term
maintenance cost is significant, and on a project like this, it
would have been millions and millions of dollars. I'll talk a bit
more about it, but it would relieve us of that long term maintenance
cost as well.

Just some of the benefits again -- and we've talked about many of
these -- it would improve mobility and safety on the 35 corridor
itself, transfer project risk to the private sector -- I'll talk a
little bit more about this -- operation and maintenance costs would
be paid by the partnership, accelerate this project by decades, and
then the concession fee and any revenue-sharing -- and again, I'll
talk a bit more about that -- could be utilized to advance other
projects.

The project agreement itself, Texas would receive a $1.35 billion
project, state highway, public infrastructure at no cost to us. What
we envision in this agreement is an up-front $25 million concession
fee, again that could be utilized for other transportation projects;
an estimated, in present value terms, $245 million of
revenue-sharing out over the 50 years, and that relates to the
figure that you mentioned earlier, Chairman; and of course, a long
term source of maintenance for this project. In return for that,
Cintra would receive the right to collect tolls for 50 years, and in
return, they'd have the obligation to design it, build it, finance
it, operate it and maintain it.

Now, the design and the construction standards would be to
state/federal standards. We will be overseeing that, we're not going
to shirk from our duty, we will be overseeing that general process.
It will be designed as a high speed facility and state of the art.

MR. HOUGHTON: Phil, before you move on, can you go back?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: Are you going to talk about -- and I know you have
numbers, Amadeo, on the maintenance -- what are we shifting to the
private sector in maintenance in real dollars?

MR. RUSSELL: Commissioner, I don't know if I have that. Amadeo, do
you? Let us get back to it. It will be millions and millions of
dollars, but we should have done that.

MR. HOUGHTON: And the other thing -- Mr. Chairman, you alluded to it
-- we have from a contractor a firm negotiated design and build that
was about $200 million.

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: If we're getting $245- back, the swing there is close
to half a billion when you talk about the swing that just occurs.

MR. WILLIAMSON: And I don't want to confuse anyone in the audience
that's kind of new to this discussion -- I particularly don't want
to confuse our fellow citizens in the free press -- but $245 million
is cash value.

MR. HOUGHTON: It's cash value.

MR. WILLIAMSON: Our $86 billion problem is extended over time. If we
netted the $86 billion back to cash and said what would it take if
we could spend it right now and solve our problem, it would be
something like $31 billion. So this is a huge chunk out of our
problem whether you look at it at present value or whether you look
at it over time, as our $86 billion problem is over time. And you
touched on something, the reduction in maintenance costs is also a
huge reduction of that problem.

MR. HOUGHTON: We don't focus on that enough. Because currently state
gas tax revenues no longer cover maintenance on the system. Is that
an accurate statement?

MR. RUSSELL: Correct.

MR. HOUGHTON: So all of our state gas tax is being sucked up by
maintenance.

MR. RUSSELL: Every penny and more.

A little bit on the revenue-sharing -- we've had some discussion on
that. Part of the effort, a lot of the effort is exactly what would
be the best for the state of Texas. When we started this procurement
process, we tried to create an apples-to-apples comparison, and so
we told all three proposers for purposes of this procurement please
tell us what an up-front concession fee might be in your game plan,
and I think people kind of naturally gravitated to that and assumed
that's ultimately what we would want, all that money up front. But I
think as we've gotten through this, what we've ultimately determined
to be appropriate is we want some fee up front, that $25 million
concession fee, but we kind of like being partners out over the long
haul and it provides a revenue source out over the 50 years.

And so ultimately what we've designed here is a mechanism -- and we
call them bands, and I think Michael mentioned it as well -- where
we have different bands, and essentially -- I'll try to do this in
everyday terms -- we know that the private sector is in business to
make money, they want a return on their equity, no surprise there. I
think there's some public push-back of is there any protection or
any limitations of their rate of return. So essentially we've come
up with this banding mechanism, and what it says is we think that
they should have a reasonable opportunity to have a return on their
investment, their equity investment, so for the first band up to an
11 percent equity return, we want right off the top from the first
car that comes through we want 4.65 percent of that revenue coming
in.

So think of it this way: we get about a nickel on every toll revenue
that comes in right off the top, first thing, up to the point where
they achieve 11 percent equity return. Now, we could get a lot more
traffic than anybody anticipates and we want to guard that situation
--

MR. WILLIAMSON: We want the citizens of the state of Texas to share
in that benefit.

MR. RUSSELL: Yes, absolutely, and it's revenue, again, that we can
use for other transportation projects.

So contractually, if there's more traffic, if there's more
congestion relief off 35, there's even more traffic that comes on
this project, and say their equity return would jump up to 15
percent turnabout, then we want a little higher percentage as well,
so our revenue percentage would jump up to 9.3 percent, almost a
dime apiece. If their rate of return exceeds 15 percent, then we
would be into it for a 50-50 sharing in that revenue throughout the
life of the project. And again, we estimate the present value of
this at about $245 million.

MR. JOHNSON: Phil, I missed one point.

MR. RUSSELL: Yes, sir?

MR. JOHNSON: Are we talking revenues here or are we talking about
cash flow?

MR. RUSSELL: We're talking revenues.

MR. JOHNSON: Gross revenues.

MR. RUSSELL: But again, we'll be getting our nickel right up front,
we'll be first in line.

MS. ANDRADE: From day one.

MR. RUSSELL: From day one.

Other agreement terms. Revenue-sharing is based on 70 miles per hour
speed, and increased speed limits would result in additional
revenue-sharing. The idea behind this -- and I talked about it
earlier -- there is a possibility that State Highway 130 could
become part of the Trans-Texas Corridor, don't know that yet,
environmental process will determine that. If the environmental
process deems that State Highway 130 should become part of the
Trans-Texas Corridor, then we would have the ability to increase
those speeds up to 80 and 85 miles per hour.

In case anybody is thinking about asking the question, we're
ensuring that this facility will be designed as a state of the art
facility where we can safely transport folks 85 miles per hour. So
it will be designed to accommodate that higher speed if the decision
is ever made to make it part of the Trans-Texas Corridor. Now, if
that occurs, then there will be an incremental increase in traffic
from 70 to 80 and 80 and 85. And so we've captured that in this
contract that if that speed limit is increased, more traffic will
occur, and that we want one of two things: either we want to
increase that up-front $25 million to a higher level, or we want a
higher percentage of that revenue-sharing in each one of those three
bands. So we'll have the option either way to increase our up-front
cost, our up-front payment, or to increase our percentage throughout
the 50 years.

Yes, ma'am?

MS. ANDRADE: So those will be our standards, our construction
standards?

MR. RUSSELL: Yes, ma'am.

Capacity improvements. C-Z will be required to maintain specific
levels of service. You know, the chairman has spoken previously
about if you ask anybody if they really wanted to pay a toll,
probably everybody would say no, but the realities are this may be
an option for folks to kind of get a bit of congestion relief. Well,
if we're asking people to pay a toll to drive on this roadway, it's
only fair that they get to maintain a good quality of service, and
so the contract is specifically detailed so that if traffic speeds
start dipping down, say below 60 or below 55 miles per hour, then
that will invoke certain requirements on C-Z to improve that level
of service, very likely could be additional lanes would be added.

So to say it again, if traffic speed starts deteriorating, if we
start having congestion problems -- and we will, obviously, over the
length in the future -- then C-Z will be required to add additional
lanes to ensure that the motorists have a good high speed facility.

Non-compete clause, that's always something that generates a lot of
excitement and interest. We think we've got extensive protections in
this to maintain flexibility. Just as we did on the 130 project,
Segments 1 through 4, we ensure that all projects that are in our
current long range plan will be built as planned, period. What I
think is of special note is there will be no limitations on our
ability to do work on 35. All the work that our district engineers
have been working on to add additional lanes, all of that continues
abated. Frankly, we can add additional lanes in the future if we so
desire. So no future roadways are delayed, no prohibited.

The contract does establish something called a competing facility
zone, and I'll try to explain it. Essentially it's a ten-mile wide
band and if the state chooses to develop projects in that area that
have either a negative or a positive effect on the overall revenue,
then we will analyze that and take that into consideration. Now let
me stop and say this isn't talk about a city or county or somebody
else that we have no control over adds a facility, this is if TxDOT
chooses to add a project.

And I think when you look at it, if we add a project, it could be
deemed to be a competing facility that would drain cars off the
State Highway 130 project, or it could be bringing more traffic from
35 to 130, so it could actually be increasing traffic on 130, and
again, that's a good thing. We want to make sure that we can relieve
congestion on 35 and that everybody has an option. So it could be
the pro or negative, pro or con, and the contract establishes an
ability to analyze that and take that into account.

MR. JOHNSON: Who makes that determination?

MR. RUSSELL: We'll look at it. The burden of proof is on C-Z, and
we'll look at the data and either agree or disagree.

Toll rates. Let me start off by saying I've read stuff, heard stuff
that there will be no cap, there will be no constraint -- I think
Commissioner Andrade heard some of that yesterday -- but the reality
is that we will have a cap on what the increase in toll rate can be.
Ultimately, though, market rates I think will pretty well be based
on consumer demand.

You've heard me in the previous slide indicate that we have no
limitations on the work we can do on 35, and even if we didn't have
a cap on the toll rate, we would argue that Cintra Zachry wouldn't
be increasing toll rate. All that's going to do is chase people off
130 and put more and more people on 35. So they're always going to
look at it as a market-based situation and they're not going to
increase toll rates to the extent that they're going to chase people
away, they want to incentivize people to utilize the roadway.

MR. WILLIAMSON: In other words, the argument for controlling tolls
as a public policy is entirely defensible when you're building a
road that's a person's only choice between point A and point B, it's
totally without defense when you're building a parallel road and
your taxpayers always have the choice to drive the tax road they're
paying a low gas tax rate for or to drive the toll road that they
would pay a market-based or consumer-driven rate.

MR. RUSSELL: Absolutely.

MR. WILLIAMSON: And one of the arguments -- I noticed in the
previous slide you touched on it before I got back -- I need to
re-emphasize one of the arguments that is often advanced by those
who are concerned about this transaction is that a Spanish company
is controlling the road. It's clear from the slide that is not the
case.

The other argument is that we will cease our commitment to
Interstate 35 because -- not to be too repetitive, but we do tend to
see our future through the prism of our past -- we compare the
Trans-Texas Corridor and its impact on the interstate system to the
devastation that occurred in some communities when the interstate
system was built, but what people forget was there was no competing
open free tax road for the interstate to compete with. That is the
primary reason those communities no longer had any traffic. In this
case we're paralleling an existing open, non-stop interstate system,
so the same impacts could not be expected.

MR. RUSSELL: I would agree completely.

The reality is, Chairman, on 35 the struggle is not going to be to
keep people on 35, the struggle is going to be to get them to move
off to a parallel connection. 35 will continue to garner a huge
amount of the traffic that's occurring north and south, but people
will always have the option. If Commissioner Andrade drove up
yesterday, she will always have the option to choose 35 or choose
State Highway 130 as a toll road, her option.

Now, we talked a little bit about market-demand and consumer-based
decisions, but the reality is state law under House Bill 2702 does
require that the department, the commission approve the toll-setting
methodology. It doesn't say that you have to individually on a
yearly basis set the toll, but it does require you to set the
methodology that Cintra Zachry would utilize to increase that toll.

MR. WILLIAMSON: Or any other toll road operator.

MR. RUSSELL: Or any other toll road operator, that is correct,
exactly.

And so the process, what we thought was probably the best, the most
fair escalation ability was something that's based on what the Texas
economy is doing, good or bad, and so we selected something called
Gross State Product, and we think that's probably a pretty good
indicator of how the Texas economy is occurring on that particular
year. So that would be the methodology. They could increase it no
higher than that Gross State Product. It's not to say that they
would, but that would be the cap, the limitation that they could
utilize on any one year.

And again, my sense is they're going to be very much market-driven,
so they know what the cap is but my sense is they're going to be
very careful in increasing that toll and chasing customers away,
they want them on the roadway.

MR. WILLIAMSON: They might even go out and market lower toll rates
in order to incent certain types of people to go over.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: For example, they might go to UT and offer a bonus
to UT alumni.

MR. RUSSELL: Well, that's something that I would fully support, I
think it's a very good idea.

MR. RUSSELL: He said that, Mr. Behrens. I said a 50 percent discount
for Aggies.

(General laughter.)

MR. RUSSELL: Risk transfer. And you know, commissioners, this is
something -- again you're talking about looking at the prism of the
past -- I think all of us that have worked for the department for a
number of years kind of look at risk transfer at least early on and
we kind of scratched our head. Those are things that we were just
accustomed to in government of accepting that risk. We didn't think
of it as a big deal, that's just something we do as our everyday job
function, but the reality is that's a substantial, substantial
transfer of that risk when we can get the private sector to take
over some of those matters.

For instance, construction delay. Again, estimated opening at 2012.
They will be held accountable and the idea will be that it will be
open at 2012. We talk about inflation risk and other price
uncertainties. You know, Chairman, when we really originally looked
at extending this project in 2002, I don't remember offhand but the
construction cost was a lot less, and over the past few years,
particularly the past year or so, we've had some huge increases in
construction cost, whether it's attributed to steel, concrete or
petroleum, but the reality is the private sector in this case will
be absorbing that risk.

MR. WILLIAMSON: Let's use that as an example, again laying the
groundwork for our discussion with El Paso in a few minutes. When
you talk of risk transfer, we speak of it generally at multiple
levels, not just at one level. There's the risk of how much more
we'll have to pay for a road if we wait to build it as a tax road 25
years from now versus letting someone else build it as a toll road
today -- that's one kind of transfer of risk. But is it also not the
case that we're transferring the risk that the traffic projections
and the population projections upon which we're basing our plan turn
out to be not correct, we've transferred the risk of taking gasoline
tax money and building a road that's not heavily used to the private
sector and we're permitting them to make a profit from having taken
that risk, so that's another kind of risk transfer.

MR. RUSSELL: That's exactly right, and that's the fourth bullet
point: Traffic demand and toll revenues. When I talked to, in
earlier slides, about those revenue bands, up to 11 percent rate of
return or 15 percent, there's absolutely no guarantee that they'll
ever achieve those. That traffic risk is all theirs, they're
absolutely absorbing that traffic risk.

The most obvious one that's not on the page that we wouldn't ask
Phillip to market, but the one that we have to consider is the risk
we run every day of the federal government continuing to rescind our
apportionment of the gas tax, forcing us to reduce projects because
our reimbursement from the federal government shrinks.

MR. HOUGHTON: What is that number today, Mr. Chairman, the
rescissions?

MR. WILLIAMSON: I think the rescissions this year totaled $250
million, and we have been given preliminary notice that another $125
million is on the way.

MR. HOUGHTON: And that will be allocated, Amadeo, across the system?

MR. SAENZ: (Speaking from audience.) We'll be looking at that.

MR. WILLIAMSON: So that's another form of risk. We're transferring
the risk that the money available to us projected ends up being
less, meaning less tax projects we can buy which also means our $86
billion gap grows as opposed to shrinks. We're transferring that
risk to the private sector.

MR. JOHNSON: Phil, can we highlight bullet point number 3 or at
least focus on it for one moment?

MR. RUSSELL: Yes, sir.

MR. JOHNSON: One of the things that I'm particularly drawn to about
this partnership is the entrepreneur's ability to make certain
decisions, and the road surface is one of those decisions. We are
not going to dictate the type surface that they build. It makes
sense to me that if they go concrete, they're up-front costs are
going to be more but their maintenance costs are going to be less,
and if they go another surface, their up-front costs are going to be
probably less than concrete but their maintenance bills are going to
be higher.

How do we make sure that the standard of maintenance, standard of
the surface of that facility is in keeping with the standard that
this department has always sought and maintained in our system
across the state?

MR. RUSSELL: That's a great question, Commissioner. As we entered
into this agreement, what we deemed to be appropriate was to make
sure that they had guidelines of which they could propose on and
which we had some expectations of how the project would be
developed, including maintenance standards. We provide those, we say
this is what we expect. It could be ride score, it could be a number
of different engineering elements, but we set those standards.

But just as important is we have to step back, they're trying to run
it like a business. And I'll pick on Thomas because I think I saw
him here earlier. When we first started talking about this a year or
so ago, some of the folks in Construction, the way we have always
designed or constructed a project, once a contractor left, if we
started having problems on it, then that kind of came back to us,
and so the discussion was if we let them have more control, what
happens if we start having problems on the pavement.

My response is not our problem, that will be somebody else's on the
private sector problem. It will be in the contract that they have to
maintain certain ride score or whatever it is. They will be
responsible for fixing that.

The only thing, Commissioner, that we made very, very
straightforward to the private sector that we absolutely won't even
move out on a day-to-day basis, anything related to safety. Anything
that's related to safety, TxDOT absolutely will be there on a
day-to-day basis to ensure that we have a good, safe, efficient
roadway.

MR. JOHNSON: Well, you know, I asked about the determination of
whether a facility, a new facility competes or doesn't compete. Who
makes the determination on is the ride score or whatever
satisfactory, keeping with the standards that this department sets
for itself?

MR. RUSSELL: We'll have an independent engineer that will be looking
at all of the data, from a ride score, just a whole bunch of things,
maintenance, construction. That independent engineer will be
providing information to both us and the Cintra Zachry group, and so
they'll be making an independent analysis. We can either agree or
disagree with it, and then there's a process in place of how we
solve any sorts of concern or come to some sort of resolution.

MR. JOHNSON: Let's hypothetically assume that in the type of
pavement selected we have a disagreement on the safety aspect of
that pavement. How do we reconcile a difference like that?

MR. RUSSELL: Well, I mean, you're right, there could be a gray area.
We could have a ride score that kind of looks like some sort of
maintenance issue but in reality it's a safety issue. I think in the
interest of safety we'll have a bit more leverage in that contract
document to take care of business quickly. That's obviously
something that can't languish for a week or two weeks or three weeks
while we kind of sort it out internally, so if there's a safety
issue, we'll have the ability to move in quickly and fix it and move
on.

MR. JOHNSON: I just want to make sure that we're not neglecting our
responsibility in passing that responsibility of the standard of
safety and the standard of the maintenance of the ride score, et
cetera and letting somebody else make those decisions when clearly
we are giving somebody a right here but they have to live up to a
certain very high standards.

MR. RUSSELL: Commissioner, I guess we started on all of this program
with baby steps first, and again, I would still look at the project
that Bob is constructing, 130, the northern section, and we had that
dilemma early on. Any project that we'd ever designed on a
design-bid-build basis, we absolutely designed, we said whether it
was going to be concrete or asphalt, and we did the design, and then
we asked a construction company to design it. With 130 we started
changing that paradigm, and we said, Really, guys, we don't care
whether you use asphalt or concrete because we know every proposer,
every company will have different expertise, you all do what you do
best, but we do have some expectations of the end product, the
performance product.

And this one really is a natural progression to where we are in a
concession base, and we think on a lot of those day-to-day
activities we can step back a little bit, let the private sector run
their business, but we will have standards, we'll monitor it.
Federal Highway Administration is okay as well, they've approved
this general process.

MR. JOHNSON: Thank you.

MS. ANDRADE: Phil?

MR. RUSSELL: Yes, ma'am.

MS. ANDRADE: As Commissioner Johnson brought up safety, it reminded
me that we need to remind the public that it remains a state
highway, Department of Public Safety will continue to patrol our
state highway. Right?

MR. RUSSELL: Yes, ma'am.

MS. ANDRADE: Okay.

MR. RUSSELL: I was going to bring that up as well. Through the
chairman's earlier comments, I think there's some discussion. First
of all, it's private, it's not state highway, and at the end of the
day the Department of Public Safety is still the group that's
policing this state highway just like any others.

MS. ANDRADE: Okay, thank you.

MR. RUSSELL: We talked a little, I think, on most of those.
Financing, the interest rate risk, that's another area of
substantial risk transfer that Cintra Zachry will be taking into
account.

Chairman, you thought we weren't listening to you for the last five
years. We were, we heard very clearly that you absolutely expect all
of our TxDOT roadways to be all electronic. There will be no
inconvenient toll booths to stop and dig in your pocket for
quarters, it will be an all electronic. You all have been consistent
for the last three, four, five years that you want to have an all
electronic system. This will be it.

It will be interoperable, another critical issue for the commission,
with all the toll roads in the state. We'll be looking at TxTag
again. If you want a toll tag sticker, that's fine. We've also put
together a process for video billing where we'll be able to handle
that either way through a TxTag or just through video billing. We
retain the customer service center, what we call kind of the back
room, all the business operations, the day-to-day discussions with
our TxTag customers. Cintra Zachry will assume all the toll
equipment operation. To say it another way, they'll be the guys
installing the equipment on the overhead gantry that will read the
TxTags and all that, send the data to us, and then we'll be
responsible for collecting those revenues, handling that, and then
sending the money back to the private group.

Alternate funding scenario. And Chairman, we've talked a little bit
about this, but Amadeo and Mike wanted us to kind of look at it from
a public sector standpoint and say okay, there's always a lot of
discussion, what happens, can TxDOT just do this project ourselves,
why would we need the private sector involved. And so we asked our
financial guys, James and KPMG and all the financial guys to kind of
run some numbers, and we asked them to be very, very, very
conservative on their estimate.

And essentially what they came up with is that if we built the
project today without Cintra Zachry, if you all commanded us today
to go out and build it, we'd conservatively have to come up with
over $700 million in public funds, gas tax dollars.

MR. WILLIAMSON: Which is why we wouldn't have built it because we
don't have an unplanned for $720 million.

MR. RUSSELL: Unless somebody else is willing to give it up.

I will also say, in my opinion, they did what we asked, it's $720-,
it's conservative. If you actually gave us that commandment to go
build it, you'd probably see me stuttering and hesitating because I
think actually it would be closer to a billion dollars. But for our
conservative basis so nobody could say we're exaggerating, we said
it would come up with about $700 million of extra gas tax dollars to
build this as a TxDOT toll road.

And again, we talked a little bit earlier about some of the right of
way costs. That was a huge issue four or five or six years ago.
Commissioner Johnson remembers those discussions very well. It would
relieve a huge burden from those counties. Caldwell especially is a
county that's rural in nature, they don't have a lot of financial
means, yet they're getting caught up in a lot of the growth in
Austin and San Antonio and it's reflected in those right of way
values.

MR. WILLIAMSON: Now I want to explore that just a second.

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: Because I think if a Caldwell County judge were here
or Guadalupe County judge were here, they would say well, you can't
count that as a cost toward it because we haven't got that money, we
weren't going to pitch it in the pot anyway, so those are funny
numbers. They wouldn't say it negatively but they would just say
those are funny numbers.

Is David Casteel here? Is Bob Daigh here?

MR. RUSSELL: Bob is here; Bob may be in the outer room.

MR. WILLIAMSON: He no doubt heard me because Bob listens to what
we're doing.

Let's play a game.

MR. RUSSELL: Here he comes. I knew he was in that outer room.

MR. WILLIAMSON: Let's play a game a minute, members. Let's assume
that we weren't willing to do this but the pressure on us through
the legislature reached the point that we had to build this road. Is
it the case, Bob, that the Austin District and the San Antonio
District, because of the way we apportion our funds now -- we don't
approve projects here, we apportion funds to districts -- is it the
case that the Austin District and the San Antonio District would
have to work the cash flow to build this road out of their
apportionment?

MR. DAIGH: That's correct, sir.

MR. WILLIAMSON: So if you lived in Caldwell County and you had a
state highway you needed improved, and the need to finish State
Highway 130 became so intense it had to be done, in effect, a
project that would have been built in Guadalupe County would not be
built in order to transfer the cash to this project to pay for it.

MR. DAIGH: That's correct, and vice versa.

MR. WILLIAMSON: So really, if you were in Caldwell or Guadalupe and
at one time Comal County and you didn't have the cash to pay for
this right of way and contribute your share, one way or the other
you were going to suffer the loss of this $80 million either through
paying it in cash or through deferred transportation projects that
would have occurred.

MR. DAIGH: Yes, sir.

MR. WILLIAMSON: Thank you very much.

MR. DAIGH: I would like to also point out that that alone is several
years of our total allocation, so that would be a very long time in
coming.

MR. HOUGHTON: How many years of your allocation is that number?

MR. DAIGH: In 2017 our allocation is approximately $24 million, so
you're looking at four years of the total allocation in 2017.

MR. HOUGHTON: Would be sucked up into this.

MR. DAIGH: Would be sucked up into that one project.

MR. WILLIAMSON: I don't think we would have afforded the highway.

MR. JOHNSON: You know, another way to look at this right of way
issue, the right of way has got to be acquired, somebody is going to
pay for it.

MR. RUSSELL: Commissioners, again just a summary of the agreement
itself. The concession would be for Cintra Zachry to design, build,
finance and operate and maintain this project, and collect tolls for
up to the next 50 years. Toll rates are market-based with an
escalation methodology that would be approved by the commission. All
those substantial project risks that I talked about in the previous
slides will be transferred to Cintra Zachry.

The state, in return, would receive a $1.35 billion project many,
many years earlier with no public funds. We would receive an
up-front $25 million concession payment. Over the 50 years we would
receive, it's estimated, a substantial amount of revenues, what
we've present valued, what if we got the money today, it would be
worth $245 million and a long term funding source for operation and
maintenance.

And in conclusion, again, it's a new asset, no cost to the state;
revenue-sharing will accelerate other needed projects; we'll enjoy
less congestion whether we choose 35 or whether we choose State
Highway 130; it furthers those state transportation goals;
encourages private investment; preserves local resources;
accelerates those projects, as has been pointed out, with safety and
mobility that promotes that productivity and quality of life that I
think all of us as Texans enjoy.

Commissioners, I'd be happy to address any questions you might have.

MR. WILLIAMSON: Have we touched upon everything we want to with Phil
at this time?

MS. ANDRADE: I have a question.

MR. WILLIAMSON: Please.

MS. ANDRADE: Phil, on the concession fee that we're getting and the
money that will be earned throughout the 50 years, is that money
being applied or are we projecting to apply it for projects in that
region?

MR. RUSSELL: I think obviously that would be the call of the
commission. There's some statutory language I think applies and it's
something like to TxDOT districts, I believe, is how that's related.

MS. ANDRADE: And those monies, can they be applied for projects
other than just road-building?

MR. RUSSELL: Other than just roadway projects? Oh, you're saying
other transportation projects?

MS. ANDRADE: Yes, other transportation projects.

MR. RUSSELL: Yes, absolutely.

MS. ANDRADE: Okay. Thank you. Oh, and I had one other. When I came
to you on the commission, I think it was clear that this region
wanted 5 and 6 to be completed, and it was always planned that it
would be a toll road. Right? So there was never any question whether
it was going to be a toll road, not a toll road, they just wanted it
to be completed.

MR. RUSSELL: Right. Twenty years ago they just wanted the project
and they were frustrated because it couldn't be delivered.

MS. ANDRADE: All we were looking for was relief from congestion.

MR. RUSSELL: Clearly.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: I'm going to have a couple of other questions, but I
think it would be appropriate to permit testimony at this time,
unless, Ted, you or John want to talk with Phil? Okay, we're going
to take testimony at this time on this discussion item, and you're
up.

MR. DILLON: There was about a million points on that power point
thing he just went through. I wish I could rebut each item.

The assertion that the goal of this panel and the rest of the gang
that is trying to tax us out of existence is not to reduce
congestion on our roads. If that were the case, four and probably
six entrance and exit ramps on I-35 -- which is already a parking
lot -- would not be scheduled to close this year in Round Rock to
the detriment of traffic flow.

Now, I think I heard him say that the Spanish-owned company is going
to generate all the profits. Is this thing on?

MR. WILLIAMSON: Oh, yes.

MR. DILLON: Good -- all the profits from the tax road, but that the
state and the people are going to be responsible for collecting the
money for these foreigners, and then you're also going to allow
Department of Public Safety to toll and patrol this new road,
generating even more revenue at the expense of the traveling public,
and the assertion that speeds of 80 to 100 miles an hour could
enhance safety when we don't know really who's responsible for
maintenance on these roads. Well, actually we do, it's the people.
The Spanish-owned company is responsible for collecting profits, the
people are responsible for the maintenance. The people's employees
--

MR. WILLIAMSON: Well, I hope they weren't confusing about that.

MR. DILLON: They were.

MR. WILLIAMSON: The Spanish company has to pay for the maintenance.

MR. DILLON: They won't do it. You're not maintaining our roads now.

MR. WILLIAMSON: I mean, I know some people say that, but I think
we're maintaining them as best we can, given the limited cash flow
we have.

MR. DILLON: Well, you're not including a provision for safety when
you close four and probably six exits on I-35 in Round Rock so that
the toll road can sweep in with their own exit that is a
profit-maker. Speaking of profit --

MR. DILLON: They're all the same, it's all Morgan Stanley, the guys
at the top.

MR. WILLIAMSON: Not Morgan Stanley. I don't think we do business
with Morgan Stanley up there. I mean, if we're going to involve
personal names, we need to get them right; otherwise, they might sue
you and me, and we don't want that to happen.

MR. DILLON: Now, the matter of whether or not this foreign-owned
toll road company can be held to a standard of safety that would
protect the people of Texas when they travel is pretty clear in my
mind. General Franco was a close friend of Adolf Hitler, his buddy,
King Juan Carlos is primary stockholder in Cintra, and they were the
original -- with their buddy Hitler -- designers in on the war roads
called the Autobahn that General Eisenhower used as a model to
create our interstate system in America.

He imported thousands of Nazi engineers and architects after the
war, as did Truman and the rest of them, to design our own Autobahn
system 50 years ago -- their Freedom Road. He even called it the
National Defense Highway Act as a euphemism for that other term. But
as they were bringing in the architects, engineers and designers for
our freeway system 50 years ago, they also brought in other war
criminals from Nazi Germany under the Operation Paperclip Program
whereby the medical experimenters, the big money guys, Prescott Bush
from Connecticut, all of that --

MR. WILLIAMSON: Let's keep restricted to --

MR. DILLON: Okay, we won't mention President Bush's father.

MR. WILLIAMSON: I'm giving you double time because our presentation
took so long, but you've got about a minute to wrap up.

MR. DILLON: Okay. Yes, I won't mention the Bush crime family in this
at all, even though there's a panic on the board apparently that
some of our money that we send to Washington, D.C. may not be
returned to us unless we're in full compliance with all their
mandates, unfunded mandates that they impose on us such as mandatory
seatbelt use, mandatory speed limits --

MR. WILLIAMSON: Motorcycle helmets.

MR. DILLON: -- the helmet laws, unfunded mandates requiring
compliance from the sovereign state and people of Texas in order to
get our own money back.

MR. WILLIAMSON: Can I infer that you're against this?

MR. DILLON: Yes, sir.

MR. WILLIAMSON: Well, that was six minutes and that's twice as long,
and I appreciate it.

MR. DILLON: Okay.

MR. WILLIAMSON: But don't leave, we've got more agenda items.

MR. DILLON: Okay. I'm not leaving.

MR. WILLIAMSON: Did Hope abandon ship?

MR. JOHNSON: I think she just had to take care of a personal matter.

MR. WILLIAMSON: We don't want to vote without all of our members
present, so do we have any other witnesses, Mike?

MR. HOUGHTON: Are we going to vote right now?

MR. WILLIAMSON: I think we're going to vote.

MR. HOUGHTON: Are we finished with testimony.

MR. BEHRENS: We don't have any other witnesses.

MR. HOUGHTON: No more witnesses?

MR. WILLIAMSON: No more witnesses.

MR. HOUGHTON: I'd like to recognize the folks that put this
together. This was a yeoman's job.

MR. WILLIAMSON: Is your mike on?

MR. HOUGHTON: Yes, it is, my mike is on. I would love to have all of
the folks that represented TxDOT to come forward, to stand up in the
audience and come forward.

MR. WILLIAMSON: That would be Amadeo, where's Mr. Ingram, James
Bass, Jeremiah.

MR. HOUGHTON: Where are you guys? Get out of the back room.

MR. WILLIAMSON: Now, this takes the place of your bonus this year,
just so you know.

(General talking and laughter.)

MR. HOUGHTON: Well, I'd just like to recognize, ladies and
gentlemen, Mr. Chairman, we set a high standard, this group met the
high standard. The first CDA program approved in the state of Texas,
5 and 6, one huge, huge success.

MR. WILLIAMSON: Before we do congratulate them, let me add
something, because almost everyone in the audience is a
transportation player at some level, either a House member, Mr.
Pickett, an HNTB engineer, an Austin Road & Bridge Company
constructor, a Morgan Company -- not Morgan Stanley -- a Morgan
Company financier, an Association of Good Roads advocate, almost
everyone in our audience is a transportation player at some level.

All of us get approached by all of you individually about different
aspects. Dalton Smith, my good friend, calls and says I'm concerned
about this, Kris Heckmann with the Governor's Office calls and says
I'm concerned about that, people call John, people call Hope, Justin
calls Hope and raises Cain about something, but the chairman almost
always gets most of the calls that go as follows:

All of your employees are bureaucrats, they're moving too slow, you
guys are in over your head, you don't know what you're doing, you're
too cautious, and particularly for me because I'm probably the most
-- well, I won't say probably, I think I might be the most
libertine, entrepreneur there is because I do believe in a totally
market-driven economy without any controls, and I get these calls
all the time. And I want to tell you, as a taxpayer in this state,
you can be very proud that all across this nation today people are
talking about a group of state employees who get it, who understand
the balance between entrepreneurial action and protecting the
public's interest, and they have striven mightily to get that
perfect balance.

There have been times when our legal staff had to say -- and thank
God they did -- Whoa, boys, slow down a little bit, think about
this. And then there's been times when our financial group has said
that may look good right now but it won't look good 20 years from
now when we're all gone and we shouldn't do that. And I'm not being
negative to Cintra or to Mr. Zachry and family, but they have their
interests and we have the public's interests, and this group of men
and women have stricken, we think, the perfect balance between those
two, and we have laid, in our view, the template for El Paso if and
when they do this, for Dallas if and when they do this, for San
Antonio if and when they do this, for Austin if and when they do
this, for Brownsville if and when they do this, we've laid the
template for how to find that perfect balance between transferring
risk and receiving benefit, between getting the asset we can have
but having to pay for it as we should as opposed to how we've been
trying to pay for our highway system the last 50 years and doing a
pretty poor job of it.

I'll turn it back over to you.

MR. HOUGHTON: I can't add on to that, Mr. Chairman.

MR. WILLIAMSON: Sure you can.

MR. HOUGHTON: No way.

MR. WILLIAMSON: Well, then let's recognize these people.

MR. HOUGHTON: Yes.

(Applause.)

MR. WILLIAMSON: Good job. Thank you very much.

MR. HOUGHTON: And with that, Mr. Chair, I move to approve.

MS. ANDRADE: I second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Let's move forward. And we're going
to take about a ten-minute break for those of you that need to do
so, and we'll be back on our agenda.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: Let's return from recess. For the audience to fully
appreciate your schedule for the day, we will be doing a little bit
of jumping around. Mike, I'd like to go to item 6, and then we're
probably, Hope, going to go ahead and advance to some of the public
transportation issues right after that.

MS. ANDRADE: Thank you.

MR. BEHRENS: We'll go to item number 6, Regional Mobility
Authorities, we'll go to item 6(a) which is a final approval for a
request for financing from Cameron County Regional Mobility
Authority. Phil?

MR. RUSSELL: Thanks, Mike. And for the record again, I'm Phillip
Russell, director of the Turnpike Division.

The minute order before you, item 6(a), as Mike said, relates to
Cameron County Regional Mobility Authority. If you remember, back in
April you all approved the first step, a preliminary approval for
this financial assistance to the Cameron County Regional Mobility
Authority. This would be the final step for the approval of that
financing.

The agreement itself would be in the form of a loan for $21.6
million that the Cameron County Regional Mobility Authority would
utilize to pay certain costs for preliminary engineering, financial
planning, and preliminary development of the West Loop project on
the west side from US 77/83 all the way down to Palm Boulevard in
Brownsville. The rest of the money would be utilized for
environmental studies, some design and legal services, and some
preliminary development costs for the South Padre Island second
causeway bridge which we've talked about for a number of years.

Staff would recommend approval of this minute order.

MR. WILLIAMSON: Members, you've heard the staff's explanation and
recommendation. We do have two witnesses, with your permission, our
friends, Pete Sepulveda and David Garza. Pete, who goes first? And
they are our friends.

MR. GARZA: Mr. Chairman, commissioners, David Garza, and I'm honored
to be here. I can't believe our chairman passed up on this
opportunity, but David Alex asked me that on behalf of the chairman
and the entire board of the Cameron County RMA that we thank you for
this opportunity for the consideration of the toll equity grant
application or loan application.

And as you all will remember firsthand when you visited Brownsville
in your April commission meeting, Cameron County and South Texas is
a rapidly growing region with promising opportunities for years in
the future, and our Cameron County RMA is pledged to contribute to
its economic sustain ability by planning accordingly and
accelerating transportation projects that will enhance the economic
vitality of this international region.

Today is a first step in moving forward with this goal in mind and
we thank you for your support and we look forward to continuing a
great working environment. Thank you.

MR. WILLIAMSON: Members, anything for David?

MR. HOUGHTON: David, congratulations. My questions to you are the
loan is for the West Loop project. Specifically what is the RMA
doing on those projects? We'll ask Pete. Okay.

MR. WILLIAMSON: Any other questions for David?

MS. ANDRADE: Not other than thank you and give my best to your
chairman.

MR. GARZA: I will. Thank you.

MR. WILLIAMSON: Thank you, David.

MR. SEPULVEDA: Good morning, Mr. Chairman, commissioners, Mr.
Behrens. Thank you for the opportunity to be here.

I'll take just a few minutes and give you an update on what the RMA
has done the last couple of months. We have completed a strategic
plan that the board has outlined eight goals that they want to
accomplish between the year 2007 and the year 2011. In developing
the strategic plan, we worked very closely with our neighbors on the
Mexican side with the state of Tamaulipas and with Secretaria de
Camiones y Transportes in Mexico City, and ensuring that our
transportation infrastructure network on the U.S. side lined up with
future transportation infrastructure projects that either the state
of Tamaulipas or Mexico has for the next five years.

We have also completed the first phase of the public involvement
plan and we're in the process of moving forward to the next phase of
that plan. Both of these will be available on our website and will
be distributed throughout the community and in Mexico as well.

One of the things we did was a strategic plan and we have a draft,
we don't have the final, but we've translated it to Spanish and
we're going to use that to promote the regional mobility authority
throughout Mexico.

After your approval of our agenda item today, we'll begin
preliminary development on two projects. One of the projects that
I'll talk about this morning, Cameron County is our sponsor -- not
our sponsor but our partner on, and on the second causeway project,
in addition to the county and TxDOT, we're going to partner with the
town of South Padre Island and the city of Port Isabel, and this
involves a second causeway linking South Padre Island to the
mainland. The funding that we receive will be utilized for
preliminary environmental analysis, public involvement, traffic and
revenue studies.

The West Loop project is a project in the Brownsville area that we
are going to develop as a toll road. It's about an eight-mile
stretch of road that we are in the process of negotiating the scope
with our GEC to begin the environmental assessment. Once we do that,
then we can proceed with the preliminary engineering of this
project.

The local district office in Pharr has done quite a bit of work on
the environmental assessment, along with the county, so we're hoping
that we can reduce the amount of time that it takes to complete the
environmental assessment and receive a finding of no significant
impact.

One of the interesting projects that we just became involved with,
partnering with Cameron County and the cities of Harlingen and San
Benito, the RMA is now spearheading a rail relocation project in the
Harlingen-San Benito area that the project entails relocating the
rail away from the urban areas to a more rural area. Our partner is
also Union Pacific. We started working about 30 to 45 days ago, but
we feel very strongly that in the next 90 days we're going to have a
plan that includes Union Pacific's concurrence on different
corridors that we can relocate that rail, and in addition to that,
we believe we're going to come up with a plan that will relocate the
switch yard from downtown Harlingen to the switch yard in Olmito
north of Brownsville. In speaking to the local UP officials, they
believe that about 70 percent of the congestion in downtown
Harlingen is created because of the location of the switch yard.

So it's a major project that the RMA is heading and we just feel
very honored to be able to work with the county and the local
communities in making that project a reality.

In addition to that, we are working on a north loop, and this
involves a loop between the cities of Harlingen and San Benito. What
this is, there is an existing farm to market road that begins at the
Free Trade International Bridge and goes north about 15 miles, and
then ends at the intersection of another farm to market road. And
the project is already underway, our consultants are working on the
environmental assessment and the corridor analysis, but we're going
to take this project about 18 miles northwest to connect to
Expressway 77. In the meantime, Hidalgo County is coming in with a
loop that's going to connect with our project.

What we've done here, we have created a transportation corridor that
has both a rail component and a highway component, and we will try
to see if there's a way we can create one environmental document
that has both the rail and the highway component. We're working very
closely with your local district office in Pharr.

In addition to that, we're partnering with the city of Brownsville,
city of Harlingen, Cameron County, and the Port of Brownsville in
working on pass-through financing projects in the
Brownsville-Harlingen area, one that would connect with the Port of
Brownsville to an international bridge as well as to Expressway 77.

So we've had quite a bit of success the last couple of months. We've
worked very closely, keep the communities within Cameron County, as
well as the county involved. Obviously the county is extremely
helpful to the RMA, not only in providing cash contributions but
also in-kind support services.

So just wanted to take a few minutes to brief you, and I can tell
you this, that one of the main reasons why the Cameron County
Regional Mobility Authority has had the success that we have had is
because of your staff at the Pharr District office as well as your
staff here in Austin. Every step of the way your staff in Pharr has
been with us and guided us and we just can't thank you enough for
that.

MR. WILLIAMSON: Members, you've heard the testimony. Questions now?

MS. ANDRADE: Pete, I just want to thank you. I keep hearing you say
we're partnering, we're partnering, and that's great. I'm very proud
of that. Also, I was in Monclova last weekend and your port director
was there exploring more business opportunities, so I know that
you're very proactive and growing, and I think the region has just
got a lot of momentum right now, so keep up the good work. Thank you
so much.

MR. SEPULVEDA: Thank you. I should have done this at the beginning,
but I'd like to acknowledge, we have another RMA director in the
audience, Laura Betancourt.

MR. WILLIAMSON: Laura, come on up.

MR. SEPULVEDA: Laura is a judge-elect to the county court at law
district court. We also have County Commissioner John Wood with us,
and then one of our staff is David Garcia.

MR. WILLIAMSON: Questions, Ted?

MR. HOUGHTON: What's the reception of the RMA in Cameron County?

MR. SEPULVEDA: To this point, very well. Probably twice a month we
go to different rotary clubs or chambers of commerce and make
presentations, and we're trying to keep all our partners abreast,
all the communities within Cameron County abreast of the projects
we're working on. When we go to the next phase of public
involvement, it's going to entail a lot more detailed working
relationships with the different communities and the news media so
that we can put out that information to the public. But we've had
excellent reception up to this point.

MS. BETANCOURT: And commissioners, we've also begun meeting in
different cities throughout the county.

MR. WILLIAMSON: That's always fun.

MR. GARZA: And we've received a lot of positive reaction from the
different cities, from different committees. I think that our RMA
has actually helped the cities and the counties all work together.
They seem to really appreciate the work that we're doing and it's
going to help speed projects along. Thank you.

MR. WILLIAMSON: Very good.

MS. ANDRADE: Congratulations.

MR. HOUGHTON: Congratulations, guys.

MR. WILLIAMSON: John?

MR. JOHNSON: You know, one of the things that sort of resonate in my
mind is I've been around this commission a little longer than my
colleagues, and the projects that you're bringing forward are ones
that we have discussed with not only the local district people but
also as a commission for a long time, and they're very worthwhile
projects, but it takes the formation of an RMA which is a wonderful
tool and mechanism for getting local involvement and how we can move
these projects forward.

But we've talked about the West Loop and talked about port access,
not only the international bridge but also over to 77, and we've
been studying alternative routing for the Isabella alternative to
South Padre for as long as I've been a commissioner, and I just
think this is a marvelous day, and it shows one of the huge benefits
of being able to advance these projects with local involvement.

So I congratulate you. I think this is a great step for your
neighbors, the business people of the Valley and it's going to show
remarkable progress as we get these projects actually open.

MR. GARZA: Exciting times.

MR. WILLIAMSON: You know, one of the governor's objectives when he
ascended, before he was elected and began the process of
refashioning transportation according to his vision, one principle
that's very important to him is to lay the groundwork for any
community in the state, no matter where they are -- Lower Rio Grande
Valley, Upper Canadian Valley, doesn't matter, El Paso, Texarkana,
doesn't matter -- lay the groundwork for communities to deal with
their own local and regional issues, put TxDOT in the position of
being a partner, not big daddy, and let those communities turn them
loose to form their own partnerships in regional matters to solve
their problems.

And you know, I'm just really proud, particularly proud of your RMA
because it is exactly what Governor Perry intended, exactly, and we
will be here to be your partners, to steady you when you need it,
but not to tell you what to do -- that's your business, not ours.

MR. WOOD: May I make a comment on that, Mr. Chairman?

MR. WILLIAMSON: You may comment on anything, sir.

MR. WOOD: For the record, my name is John Wood and I do serve as a
county commissioner for Cameron County. Just what you're saying,
I've been a public servant, elected public servant for the past 12
years in the Brownsville area, and for 15 years before that I served
as chairman of the chamber of commerce and all these types of
things, and until the last few years we have not had the benefit of
being able to really set our own destiny and decide what we needed
locally, it oftentimes seemed to come down from somewhere up above,
and we really appreciate the opportunity that we've had the last few
years to work with TxDOT staff with the attitude they have, with the
way they want to help and work with us, not only in the Pharr
District but here in Austin. Certainly with you, commissioners and
Mr. Chairman, it's been a real pleasure to do that.

We're proud that we've gotten as far as we have with the RMA. We
think, as county commissioners and county judge, that we appointed
excellent people to our RMA and that's a big part of getting it
done, and they're very representative of the entire county. And so
the other cities are falling into line, we're all falling into line
to work together, to partner, as Pete talked about, and
commissioners, you mentioned. That's the only way things are going
to get done anymore because there's no pots of gold out here
anymore. It's all going to take hard work, partnering, working
together, coming up with new ideas, thinking outside the boat,
finding those stones to step on, and making our way.

And we do appreciate everything you have done for us and helped us
with and we look forward to working with you in the future. You
know, today I couldn't be any prouder if I was that blind hog that
found that acorn. It's been great. Thank you very much.

MR. WILLIAMSON: Thank you, John. It's always good to hear from you.

Pete, anything else? David?

MR. GARZA: No, thank you.

MR. WILLIAMSON: Members?

(No response.)

MR. WILLIAMSON: Jim, do you feel like you need to comment on this?

MR. DILLON: Yes, I certainly do. You know, Governor Perry has this
vision of controlling where we can travel and how much we're going
to pay. He needs to have his eyes checked. What he doesn't see is
that when you pretend like, you know, you're being generous by
releasing a little bit of local control to the people, we see
through that. These entities and taxing authorities, layer on layer
of control mechanisms that are imposed on the people, for example,
CAFTA, NAFTA, GAAT, FTAA, the Free Trade Area of the Americas --
which, by the way, is not trade at all -- we're bringing in illegal
Mexican workers and Chinese junk, we're sending out money.

And you know what, these regional mobility authorities that you're
so proud of are going to be the bane of our existence. You're
bringing in MS-13, narco-terrorists from south of the border.

MR. DILLON: They're unelected, they're unaccountable to the people.
You weren't elected, the people didn't vote for you to control their
destiny, yet you do.

MR. WILLIAMSON: I know that, but you know --

MR. DILLON: There's a conspiracy with Mexico to ruin our country,
and they're bringing Canada and the rest of the hemisphere in on the
game. Now, it's too soon to call it hemispheric or global in nature
because that would alarm some people who aren't awake yet.

MR. WILLIAMSON: You know, we listen to this observation all the
time, people running for office use these observations.

MR. DILLON: That would be me. I'm running for governor as a write-in
candidate and I need you to vote for me.

MR. WILLIAMSON: And other folks who run for high office use these
same sort of probing arguments, but you know, the system we live
under kind of anticipates that we'll elect city council persons and
mayors, county commissioners and judges, legislators --

MR. DILLON: Who are all bought and paid for.

MR. WILLIAMSON: Well, not every one. Now, be careful about painting
everybody with a broad brush. It's easy to throw rocks, it's easy to
try to paint everybody with the same brush unless you stop and just
kind of think about it for a minute. Not everybody falls into those
categories.

MR. DILLON: Well, the majority do, and if we do elect an honest
person to government, it's no time at all before the corruption, the
temptations are presented before that honest politician and converts
him over to the other side, it doesn't take long.

MR. WILLIAMSON: Are you saying politicians are tempted like everyone
else?

MR. DILLON: Yes, and they succumb to temptations.

MR. WILLIAMSON: Like everyone else.

MR. DILLON: Yes. The alignment and integration of our road system
with Mexico should not be one of our goals, should not be one of our
goals. Our goal should be to make it as hard as possible for the
gangs, the murderers, the drug runners, the coyotes, the kleptocrats
that run the Mexican government, including Fox, the
narco-terrorists, MS-13, our goal should be to make it as hard as
possible for them to enter our country, not align our roads and our
railroads in the position where they can be integrated with the
Mexican roads and they don't even have to slow down for a traffic
light.

MR. WILLIAMSON: Can I assume that you are against this agenda item?

MR. DILLON: After I finish you might make an assumption.

MR. WILLIAMSON: Well, you're one minute past your three minutes.

MR. DILLON: Well, to integrate our roads with Mexico's roads --
which is patently illegal and unconstitutional -- is to also
integrate our language, our culture, our national identity into a
homogenous glob that will only benefit the very wealthy who are
illegally exploiting the cheap labor to their own advantage.

MR. WILLIAMSON: Okay. So time is up and you're against this agenda
item.

MR. WILLIAMSON: El Paso is going to take us a while, so we're going
to go to 6(c).

MR. BEHRENS: 6(c) is an RMA that we have existing in East Texas, the
North East Texas Regional Mobility Authority, and this particular
minute order is a request to add additional counties to that RMA.

MR. RUSSELL: Thanks, Mr. Behrens.

MR. WILLIAMSON: Someone wants to join an RMA?

MR. RUSSELL: More than just one.

MR. WILLIAMSON: Not form one but actually join one?

MR. RUSSELL: That's correct.

Commissioners, as Mr. Behrens just pointed out, the North East Texas
Regional Mobility Authority, one of our earliest RMAs, composed of
Smith and Gregg counties, has been working very well over the past
year and a half under the great leadership of Jeff Austin -- I saw
Jeff at the back. They're moving forward with their Loop 49 project.
But they have been petitioned by four adjoining counties -- those
would be Cherokee, Harrison, Rusk and Upshur counties -- to join the
existing two counties on the NET RMA.

This minute order before you would approve that expansion. Each one
of those additional four counties would receive an additional board
member. There's seven on the board as it stands now; there would be
eleven board members through the addition to the RMA.

So staff would recommend approval of this RMA and I'd be happy to
address any questions you might have.

MR. WILLIAMSON: Members, you heard the explanation and
recommendation by staff. We have one witness, Jeff Austin, a good
friend of transportation in Texas.

MR. AUSTIN: Good morning, Mr. Chairman, commissioners.

MR. WILLIAMSON: You thought it was going to be afternoon but we got
to you faster.

MR. AUSTIN: That's right. For the record, I'm Jeff Austin, III,
chairman of the North East Texas Regional Mobility Authority, and I
also have Linda Thomas who is our vice chairman from Longview with
us.

I'd like to say we are excited. This is an exciting day, I think,
for transportation in Texas and especially East Texas. We are proud
to be the first RMA to grow. Believe it or not, there are people
that do believe that there are different ways to accomplish things
on a regional basis with partnerships and with coalitions.

We have tried to focus on how can we, and I'd like to start, as you
mentioned, with our initial project, Loop 49. Our leaders, not just
the elected officials, the city, the MPO, the chamber, the county
judges, even the school districts, economic development corporation,
and many large businesses came together and said, We have a priority
and that is to complete an outer loop in Tyler. Everybody was
reading off the same sheet of music with that vision is how we were
able to form successfully the RMA, and we are proud that in August
we will be opening our first section of our toll road -- which each
of you have been inviting -- using the new TxTag.

We have also been able to expand some projects that were ranked way
down low, building consensus, and we have adopted a philosophy,
since we all have the same end point in mind of getting these
projects completed, it doesn't matter who does it just as long as we
can get it done, no matter which way we fund it, as long as we can
find something that's financially feasible, look at public-private
partnerships.

We're here today, because of that model we have had four surrounding
counties petition us to join. We share a lot of projects. Some of
the counties do not necessarily have a toll viable project, but we
share pieces of it, we share rail concerns, we share the corridor of
I-69, share several trunk system routes, and we're also looking at
potential airport intermodal hub projects, and others purely from an
economic standpoint of pulling together.

Senator Eltife, right after he was elected, challenged our region:
As a region, come up with the priorities, we can better represent
you in Austin. Came back education and transportation as the top
two.

You have heard me over time talk about moving beyond the boundaries
of Friday night football. I'm here asking for forgiveness, I had to
eat my words Monday. Linda and I gave a presentation to Panola
County which is not one of the counties coming in, they would like
to eventually come in, and we spoke before the commissioners court
and the industrial foundation for the county. I had a confession to
make. Going back to fall of 1978, I was a junior in high school, I
had one of the worst hits laid on me on the football field by Mr.
Audrey McMillan, and in 1979 we were 9-and-0, they were 8-and-1,
they beat us 13 to 6. So I had to put that aside where we can all
work together.

We do share a lot of common visions but economic development is the
underlying engine to first protect what we have, and if we have the
roadways, the infrastructure, whether it's roads, rail, airports,
and the connectivity locally, wow, our region is poised for
tremendous growth. And we're excited and hope for your continued
support as we move forward, and we're really excited to grow and we
will probably be back. Thank you.

MR. WILLIAMSON: Members, any dialogue with Jeff?

MR. JOHNSON: I've got a question.

MR. AUSTIN: Yes, sir.

MR. JOHNSON: Jeff, I want you to be very honest with me now. Is
Cherokee County in the mix because that's where former Commissioner
Robert Nichols is domiciled, or do they really want to be in the
mix?

MR. AUSTIN: They really want to be there, and after we went to the
commissioners court, then we went and shared with him what we were
doing, but he is in support. And Representative Chuck Hopson, who
has been a tremendous support, represents Cherokee and Rusk
counties, and we're fortunate to say that our elected officials,
Representative Merritt, Representative Hughes, Leo Berman have all
been very supportive of our endeavors in working together, as our
three senators.

MR. JOHNSON: I think this is a marvelous example of how flexible
areas can be. You can start with a small nucleus and the others can
recognize the advantages of joining together and basically attach
themselves on, and regions then begin to benefit.

MR. AUSTIN: We want to be careful that we're not over-promising that
there's a big pot of money, and we hear this among ourselves and
working with the department that we are also a facilitator to help
bring consensus on a regional basis and at a county level using what
I shared with Smith County, what are those priority projects, how
can we lay them out over the long run, and what is the best tool to
help us accomplish the end result.

MR. JOHNSON: Good point. I mean, Commissioner Wood mentioned they
recognize that there is no pot of gold, there is no pot of money,
and we've got to work together to solve these challenges.

MR. AUSTIN: And there's more than one right answer.

MR. HOUGHTON: Jeff, what is the acceptance of the RMA in the
multi-county area, what's the attitude?

MR. AUSTIN: Wow. Anywhere from the chambers to the county judges to
the commissioners courts, the cities, the press. And I would like to
say something about the press, they have been our friend, and that's
not by accident because we've been able to share a longer range
vision for economic development. And as we look in that perspective,
we're not the whole answer but we are part of the puzzle to partner
with the different agencies and bring new tools to all work
together.

One other thing, next week when we have our meeting, we're also
having a workshop. We will be looking at forming a rail subcommittee
because of the different -- we've been listening. Companies need
rail spurs, we have some advocates for commuter rail, high-speed
rail, and preserving the corridors, so we're going to form a rail
committee, listening from the bottom up to help do this. So in
answer to your question, our communities, our different silos have
all been extremely supportive.

MR. HOUGHTON: Has former Commissioner/Senator-elect Nichols bought
his TxTag yet, do you know?

MR. AUSTIN: I'm trying to think. I pulled out one and I showed mine,
I participated in the Beta test, and he pulled out one and I think
it had all zeroes on it, so I believe it's on.

And I will say my daughter, who was going to the airport yesterday
in Dallas, she ran through, she called me between the toll gate and
up there and said, Why didn't you tell me my TxTag didn't work at
DFW yet? So she has been using it in the beta test. I encouraged
them to go to Dallas, these are two teenagers, they said, Dad, we'll
go shopping, and you've got some smiley faces on the test log. But
it's well received in East Texas, a lot of people are already
excited that travel to Dallas, Houston and Austin, when it opens up,
to use the TxTag. We've got a great marketing campaign ready to go
when we open.

MS. ANDRADE: Congratulations, Jeff, and I think you're truly setting
an example for the rest of the RMAs, and that's what we had hoped is
that the RMAs would be inclusive and would be representative of
several counties, not just one, so you're certainly doing a great
job.

Thank you, Linda, for all your work too. Say hi to Robert Nichols
for me.

MR. AUSTIN: Sure will. Thank you.

MR. WILLIAMSON: I think we're all pleased that you're here and
pleased that you're expanding. I spoke earlier about the governor's
desire to elevate each community across the state to equal status
and let them determine their own fate. His other desire, his concern
was with kind of the growing -- what he perceived to be the growing
tension in certain parts of the state between core urban area, near
suburban and far suburban, and in the cases of some communities,
concentrated cities and rural counties. He seeks ways, methodologies
to bridge those tensions to work in common, and I can't tell you
what a good example expanding your RMA is of that.

What he wishes is to understand that Jacksonville and whomever are
always going to have a football rivalry, but they don't have to have
a transportation rivalry, they don't have to have an economic
development rivalry, they can work together, even while they're
battling on Friday nights.

MR. AUSTIN: You talk about transportation rivalries. I think it is
very appropriate to one of the earlier slides when we were talking
about the transportation system to link states and major cities. In
our region our trunk system routes, our farm to market roads, our
rail and other things do that same thing on a regional basis. That's
what we have in common, one, just for the safety of the folks
playing in football on Friday nights or our vendors that come to see
us, suppliers, or people just passing through.

So we have an obligation and we are accountable to our counties, to
our judges. In fact, I could almost say we're probably more
accountable because we see them at lunch, we see them in the
morning, we see them at church, we see them at school, driving by
they'll wave at you, they know who we are and where to find us. In a
rural area you can't run and hide.

Linda has a great example, if we may, of what the RMA has been able
to do in Gregg County as far as building consensus. If I may yield
to her?

MR. WILLIAMSON: Sure.

MS. THOMAS: Commissioners, Chairman, thank you so much for letting
us be here today because it is an exciting time for us, an exciting
time for RMAs in the state of Texas, in Gregg County.

My county judge says to me every day -- because, of course, the
focus has been on Loop 49 and that's been the project that's really
given us the opportunity to do this, but Gregg County is a
participator, and so the judge says to me about once a week, What
have you done for us today? We found this project that looks like
it's going to be a possible pass-through financing project, Highway
42, and our county, to be such a tiny little county geographically,
is very strong in competition between Longview, Kilgore and
Gladewater.

Well, this Highway 42 which goes from Highway 80 to I-20 goes right
through the heart of the East Texas oilfield which is, of course,
very active right now, but it does connect north Longview,
Gladewater which goes very close to Gladewater city limits, and the
city of Kilgore, not to mention the fact that it's going to connect
us, the beginning of a connection to Tyler and Smith County. So
we're really excited. That project was way, way down on the list,
nobody had even given it much consideration, but it has risen to the
top like cream, so that's an exciting thing for Gregg County.

Once again, we're just delighted to be here. Jeff has done an
outstanding job of visiting with the East Texas people so that we
have an East Texas-plex, if you will. And of course, you know, you
realize that about 75 percent of the state will come through East
Texas on their way to the northeast, and we want the roads to be
wonderful and our area to be very inviting, so you'll come back and
come through many times. Thank you.

MR. WILLIAMSON: Thank you, and it's good to see you again.

MR. AUSTIN: Mr. Chairman, I wanted to mention one other thing, the
importance of moving beyond Friday night football, specifically with
the MPOs of Tyler and Longview, and also with our TxDOT partners we
are entering into two TxDOT districts, Tyler and Atlanta. So we have
Bob Ratcliff and Mary Owen, our DEs, have been tremendous, and our
MPO directors.

And when I say that, we have submitted a draft recommendation to the
districts, TxDOT and to the MPOs for interlocal agreements that
should we look at alternative financing proposals or should we
receive one, that we're all at the table together as partners to
find out what's best for the region and how we can partner going
forward, and I think that's an important and critical piece. We
can't do it without them, they're large stakeholders, and they've
been very receptive so far.

MR. WILLIAMSON: Very good. Thank you very much.

MR. AUSTIN: Thank you.

MR. WILLIAMSON: Jim? Easy on our microphone now.

MR. DILLON: Okay. I brought my own microphone, if you'd rather me
use that one.

MR. WILLIAMSON: No. I just don't want to break that one.

MR. DILLON: Okay. He was very wrong about how happy the people will
be to be micro-chipped, RF ID tagged, tolled, taxed, and have their
whereabouts as they travel monitored, filmed on camera, tickets
mailed to them routinely. That's all an invasion of privacy. So his
daughter may have a smiling face when she passes through that dark
scanner, but the rest of us won't.

And I notice on 16(b) or (d) that you're trying to negotiate and
fund an agreement with a supposedly top ranked design-build firm for
construction of a facility on state-owned property in exchange for
existing properties. Now, why wouldn't --

MR. WILLIAMSON: Now wait, you'll have a chance to talk about that in
a minute.

MR. DILLON: Authorizing various counties, including Cherokee, Rusk,
Harrison to become part of a regional mobility authority. Well, we
don't want to be a part of that. There is no clamor, there is no
public outcry to sign on to this program. It's being imposed on us
against our will but we're not voluntarily submitting to it out of
love and affection and a recognition that it's going to be a
benefit.

MR. WILLIAMSON: But you don't live in that part of the world, do
you?

MR. DILLON: I live in Texas.

MR. WILLIAMSON: I know, but not these four counties.

MR. DILLON: Well, it won't be long before you try to impose a
regional mobility authority on me, and we used to control our own
destinies at the local level, the federal government restricted its
activities to protecting our borders which they've since abdicated
that responsibility, and imposing tariffs and duties on
international commerce and interstate. That was all they did, plus
they minted coins and a few other little things, but the layers --

MR. WILLIAMSON: Can I assume you're against item 6(c)?

MR. DILLON: Well, I haven't made that clear yet.

MR. WILLIAMSON: I know, but it's time to wrap up.

MR. DILLON: Well, I tell you what, we don't want either the regional
mobility authority, the hemispheric or the global, or even at the
county level. There is enough control on the people from where and
how they travel and how much they pay to get in their car and go
somewhere to every other system of control that the state and the
regional authorities are trying to impose and we're very tired of
it.

MR. WILLIAMSON: Thank you very much. I will assume you're opposed to
6(c).

Anything else, Phillip?

MR. RUSSELL: No, sir.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BEHRENS: We'll go to agenda item number 6(b) now, Phil, El Paso
County, the recommendation of the City of El Paso to create a Camino
Real Regional Mobility Authority.

MR. RUSSELL: Thanks, Mike. And commissioners, on May 15 of this
year, the City of El Paso did file a petition with the commission to
form the newest regional mobility authority. The city has identified
Loop 375, also known as the Border Highway, as its initial project.

Now, as required by law, the department held a public hearing on
June 12, 2006. Notice of the public hearing was published in the
Texas Register and the local newspaper there in El Paso. At the
public hearing we had 15 individuals who spoke in favor of the
creation of the regional mobility authority, five opposed to the
creation of the RMA. We also received, subsequently, written
comments, eight of which were in favor of forming the RMA, and one
of which was opposed to the creation of the RMA.

On June 23 of this year, the regional metropolitan planning
organization took this issue up and voted against the creation of
the Camino Real Regional Mobility Authority. I believe the vote was
about twelve to eight, if memory serves me correctly.

Commissioners, I'll be happy to address any questions you might
have.

MR. WILLIAMSON: I need to establish a few ground rules because I
think this one is going to take a while. Hope, is it the case that
you have to leave at one o'clock, or you need to leave as close to
1:00 as possible?

MS. ANDRADE: Sir, I have to leave but I'll be right back. It should
take me no more than 20 minutes or 30 minutes. 1:30.

MR. WILLIAMSON: At 1:30?

MS. ANDRADE: Yes. It starts at 2:00.

MR. WILLIAMSON: Okay, I think we have time. We also have a number of
witnesses, and we have a really unique situation, this will be the
first municipal or city RMA to come before the body, and that's a
slightly different law than the law governing the RMAs we've dealt
with in the past, so there's going to be some technical questions
directed toward staff all through this. My guess is we're going to
be going back and forth between staff and testimony through most of
the next hour or so.

I'll try to arrange the testimony in a way that makes sense without
showing prejudice one way or the other. I don't think any of us have
any idea where we stand on this at the end. We're going to listen to
what everybody has got to say.

Jim, can I assume you're going to be opposed to this? It's the
creation of a city RMA. If you're going to be opposed to it, I'm
going to go ahead and let you speak now.

MR. WILLIAMSON: I mean nothing from this, I'm just curious, is that
your daughter?

MR. DILLON: Yes, Savannah.

MR. WILLIAMSON: You have a great smile, you've been very patient and
you've been watching everything and learning.

MR. DILLON: You saw that movie "Savannah Smiles"?

MR. WILLIAMSON: No.

MR. DILLON: Oh, it's excellent, "Savannah Smiles." She's only
eleven, she does not want an RF ID tag to drive on Texas roads, she
does not want to be micro-chipped or filmed so you can get on the
highway.

MR. WILLIAMSON: Just so you know, I suspect all of us are pretty
much that way. There's probably not any of us that want that.

MR. DILLON: Before I leave -- which will be right after I'm done
talking -- and in an effort to garner some votes in the November
election, I'm going to summarize what I think is wrong with the
program.

MR. WILLIAMSON: Try to keep it around RMAs.

MR. DILLON: Right, absolutely. This scheme to build a unifying road
that would tie Canada, Mexico, the United States and all of South
America into a one homogenous glob of open border, heritage and
identity destroying mass of un-American, revenue-generating joke
that's going to wipe out tens of thousands of acres of rich farmland
in East Texas -- and I know the governor cares deeply about that --
which has been in Texas families for generations and which is
producing a product, namely food, that we all will need much more
than we need the Chinese junk that is going to come in on the road
that takes the place of these farms, even though there's an
addiction to that. The oil, the Chinese junk and the cheap Mexican
labor is what our leaders in Texas are addicted to.

Now, to satisfy their heinous need to fix this addiction, they've
decided to build a road that the people will pay for to import more
illegal Mexicans and more Chinese junk into our country and at the
same time wipe out, like I said, tens of thousands of acres of
farmland that belongs to Texans that have had that land in their
families for generations.

Now, that land won't be surrendered easily, so what you're going to
have to do then is pull out your eminent domain and in Kilo v. New
London, Connecticut, the Supreme Court said that no longer is
eminent domain restricted only to the taking of private property for
public use but also for private use. Now, Cintra and Zachry,
profiteering privately off of Texas roads while having our DPS
patrol those roads for them and state employees collect the tolls
for them at a nickel on the dollar, you should negotiate a better
deal than that. You're getting a nickel from that Spanish guy?

MR. DILLON: You don't need that road if you would keep the 50
million illegal Mexicans in Mexico and the trucks that are carrying
the Chinese junk through Mexican ports up into our country in China
-- you wouldn't need that road.

MR. WILLIAMSON: Can I assume you're against this one also?

MR. DILLON: Yes, you can.

MR. WILLIAMSON: I want to tell you that you know you will always be
welcome here.

MR. DILLON: Thank you, Ric.

MR. WILLIAMSON: You've been very respectful and we're respectful of
you because you're a citizen of this state.

MR. DILLON: Thank you, Ric.

MR. WILLIAMSON: We wish you the best and we look forward to seeing
you again.

MR. DILLON: When is the next meeting, by the way?

MR. WILLIAMSON: A month from now.

MR. DILLON: About a month.

MR. WILLIAMSON: It's nice to meet you, Savannah.

MR. HOUGHTON: Jim, it's in El Paso, the meeting, if you'd like to
come out.

MR. DILLON: I don't know. Is there a toll road between here and
there?

MR. HOUGHTON: You can throw coins out on the interstate.

MR. DILLON: Thank you.

MR. WILLIAMSON: It's good to see you. Thank you for being here,
thank you for standing up. It's important that every Texan be heard.

MR. DILLON: Well, I have to.

MR. WILLIAMSON: I understand.

I think the way I want to approach this, Mayor, if it's okay with
you, we always show deference to the mayor of a city when a city is
involved, and if it's okay with you, Mayor, I would like to start
with you. I saw your tool and I was hoping you would bring some
levity to the moment. You know, my poor ticker, I've had some
trouble and I've got to be very careful I don't get too stressed
out.

MAYOR COOK: Chairman, commissioners, it's good to be before you
today.

Almost every city in the state of Texas wants to be first for
something, and I'm hoping that we're not the first petition for an
RMA to ever be denied. Six years ago I finished my first year as a
city council representative, and served three terms, then decided to
run for mayor. Not being the smartest guy in the world, I decided I
would surround myself with smarter people, so I created six economic
development cabinets, one of those being an economic development
cabinet for transportation issues, and I got experts in
transportation issues to look at the possibility of forming an RMA.

I also studied some of the Code -- the Texas Administrative Code 43,
Chapter 26.13 was the first one that I looked at -- to make sure
that when we presented our petition to you that we met all the
requirements of the Code, and I'm going to summarize some of those
right now.

You have two things in the Code that I thought were extremely
important to us. First of all, in order for us to create an RMA, we
had to request that you make two findings. Those findings were,
number one, that the RMA has sufficient public support -- and I'll
come back to that issue in a moment -- but also the second issue
that we had to approve was that the candidate projects and all the
projects that we would bring to you through an RMA were going to be
consistent with the Texas transportation plan, the metropolitan
transportation plan, the metropolitan mobility plan, and the
statewide transportation improvement plan, and also that they would
benefit the traveling public.

It was mentioned earlier that our MPO voted against the RMA.
Technically that's not true. What they did, we had a resolution
before them to request that the RMA be established, and the actual
motion that was made was to deny the resolution which is not the
same, and that's an important distinction and I'll get to it as I
discuss the public support.

Significant public support, according to the Code, is determined by,
number one, public comments received at the public hearings, and as
was pointed out to you earlier, the public hearing actually had 15
people speak in favor, five against, eight people wrote letters in
favor and one against.

And just as Jim has proven to you today by coming and suggesting
that he's opposed to regional mobility authorities and toll roads
and micro-chipping and all kinds of other things, you're going to
find the same thing even amongst elected officials, you're not going
to have a unanimous decision. In running for political office, I'm
usually happy for 50 percent plus one, and I think that if we can
get a majority of people to support an issue, then that's very
important.

The second thing that we had to do to show significant public
support was to present a resolution of support from the affected
political subdivision, and this is a clear legal argument that we
have to make sure that we met because you had a resolution from the
City of El Paso and it was supported by five out of eight council
people. Once again, it wasn't unanimous support but the majority of
the council supported this action.

Rule number 26.11(6)(b) which you alluded to, sir, mentions that --
El Paso is in a unique situation because that rule says that the
cities of El Paso, Laredo, Brownsville, McAllen, or Port Aransas may
petition the commission for approval to create an RMA in the same
manner as any county, and there's a reason that that law was passed.
The reason is El Paso finds itself in a very unique position
especially by the makeup of our metropolitan planning organization.
We have four members of the MPO that are in New Mexico, and this
project does not benefit New Mexico at all. Three of those members
were present and voted against the project.

Eighty-five percent of the county of El Paso is within the city
limits.

MR. WILLIAMSON: Is that dirt or population?

MAYOR COOK: Population and dirt, I imagine.

MR. WILLIAMSON: Is that the geographic county or just population?

MAYOR COOK: It's population-wise, but also, I think almost the
majority of the dirt also is within the city limits, and we're
growing at a fantastic rate too. For example, right now Fort Bliss
is getting ready to triple in size. We're expecting to increase the
population of El Paso by 60,000 people within the next five years
just from Fort Bliss growth alone, and we know that other growth is
going to take place. Some conservative housing estimates show that
that number could be as high as 80- to 100,000 people in five years.

But anyway, that Rule 26.11(6)(b) was specifically designed for the
city of El Paso, knowing our unique geographic and political makeup.

The third thing that we have to do to show sufficient public support
is we had to get -- and this is a quote -- "the express opinion of
any of the affected MPO." Now, I would point out to you that Hidalgo
County, for example, I looked at the minute order for the creation
of their RMA and they did not submit a resolution from their MPO
supporting the creation, and that was as late as 2005, if I
recollect when that minute order was written. So it's not necessary
that the MPO actually give their endorsement of the project, and
that's why you had the specific terminology: the express opinion, if
any. The action of the MPO was actually not to express an opinion
because they voted against the resolution that asked for support of
the RMA being established.

Under the public outreach or public support, let me tell you what we
did. It was read into the record earlier about some of the meetings
that were held, but we held two Legislative Review Committee
meetings and our Legislative Committees of the city council have
four out of eight of the members of the council that sit on that,
and those are public posted meetings, by the way. We also had one
special city council meeting just to talk about regional mobility
authorities. We had one regular city council meeting where it was
discussed, and at that meeting we decided to have a special meeting
to invite the public to it and be more open about the establishment
of an RMA.

We also had numerous public informational meetings by my
transportation cabinet. Those are those experts in transportation
that I talked to you about. We sent them out into the public to talk
about an RMA, to educate the public as to what they were. The
transportation cabinet also participated in four TxDOT meetings
where they held open houses to discuss regional mobility
authorities.

My transportation cabinet also had involvement in numerous
neighborhood association meetings. We had actually sent out over 66
notices, mailed notices to 66 neighborhood associations and told
them that we were going to be holding these meetings.

As was earlier mentioned, we had the official TxDOT hearing and the
subsequent written comments that were made. For that meeting, we
posted two separate notices within our local newspaper, The El Paso
Times. We also posted notice two weeks in advance on our city's
website so that people would know that that meeting was going to be
held. We issued press releases to the media; there were two press
releases that were issued to them so the media would come cover the
event and let the public know that the meeting was taking place. And
we also provided notices to local business organizations.

I would also like to mention another issue. Last night you made some
very astute remarks, sir, and that's not just to compliment you, but
you told us last night that some communities want to grow and other
communities do not. You said that some communities want to use all
the tools in the toolbox and others do not.

I remember a year and a half ago I came to this commission meeting
and I wrote down a quotation of yours at that time, and that was
that there are going to be three kinds of roads built in Texas,
there are going to be slow roads, no roads, and toll roads. El Paso
is going to grow, I told you 60,000 just from Fort Bliss alone.
That's not an option for us, we can't wait for slow roads, and we
can't accept no roads, we're ready to embrace toll roads, and we
want to use every tool that's in the toolbox in order to make sure
that our transportation infrastructure is second to none in the
state of Texas. We have some unique challenges in El Paso, and we're
hoping that you will approve the formation of our RMA today.

You did request last night that I bring my guitar because I told you
I'm not the world's best public speaker, and my daddy told me that I
should always end whatever my public speaking engagement is with a
song so people at least can remember something positive, so last
night I took the liberty of writing a song about RMAs.

(The mayor played and sang a song, followed by general applause and
laughter.)

MR. WILLIAMSON: Lord God, 20 years, Richard.

We're going to wait on dialoguing with the mayor to hear the
senator, and then we're going to hear one of the city councilman and
the House member, and then we'll rotate after that. So Senator
Shapleigh?

SENATOR SHAPLEIGH: Mr. Chair, members of the commission, everyone
watching on the internet, democracy is alive and vigorous in the
TxDOT Commission today. I've been to a lot of these in the last
decade, I've got to say this is the most lively one I've ever been
to.

El Paso, Texas today -- and I've been coming here for a decade to
share our story, our hope with you -- is going to be the most going
place in the country in the next decade. We're going to add between
60- and 80,000 troops and dependents to Fort Bliss, and to the
extent that we can get those troops to the theaters of war and do
their training, that's how we're going to be measured.

On our western side we're going to have another 70,000 in a town
that's springing out of the desert in New Mexico that affects our
infrastructure. We are going to have to provide the infrastructure
not just for the El Paso part of this unique sliver of land that we
occupy, but the infrastructure for New Mexico as well.

I was on the conference committee of both of these major bills that
provided these tools, 2702 and 3588, and I'm pleased to say that
everyone you're going to hear from today in our delegation, Senate
and House, voted for 2702, every single one of them, and every
single person you're going to hear from today voted for 3588 that
you're going to hear from today from El Paso. So they voted and are
on the record for the entire toolbox, including tolls.

And I mention to you that when we came to a vote on the MPO with
respect to the one project, the southern relief route, it went
through with a nine to three vote, with tolls, four lanes that are
free that exist now, and two fast lanes so that trucks and others
can come through the very unique piece of geography that we occupy
and get from east to west.

You've heard in this commission what's going to happen in Long
Beach, you know what's happening with double stacked, double track
trains. We're going to have 130 trains a day moving through El Paso,
Texas and we're going to have all the collateral truck traffic going
with it.

That very unique piece of geography means that the Franklin
Mountains -- which is the tail-end of the Rockies -- comes within
3,000 yards of the Mexican border, and everything goes right through
that corridor, and what it's created is a very unique traffic
logistical problem in El Paso which is I-10 which for whatever
reason did not get the access roads that it should have gotten back
in the '60s.

Our community, Fort Bliss, our entire region is invested in finding
an alternative route. When there is congestion on I-10, if you've
got a truck wreck or you've got a hazardous waste spill -- which is
another issue we're going to need to visit on on this border -- it
shuts down literally everything moving from Los Angeles to Houston,
and so it is not just an El Paso issue to find an alternative route
on I-10, it's a state of Texas issue.

We in El Paso are there geographically for five reasons: the
military, Mexico, movement, manufacturing, and medicine. That's why
we're there. When you look at Houston, it's energy primarily is why
Houston is there. When you look at San Antonio, it's got military,
biotech, entertainment, but when you look at El Paso, we're there
for five reasons. Four of those relate to mobility and the ability
to move people and product through that port, and I submit to you
there is no region in Texas that will get more value from
controlling our destiny with an RMA.

The RMA that was written for El Paso, I know all about because I
participated in writing nearly every piece of that statute. We were
the first to say let's let a city do it because we're 85 percent the
city of El Paso, the first to say let's move some of this
infrastructure and use some of the money to complete the loop into
New Mexico, the first to say that truck congestion at the bridges is
going to cost us jobs so how about using some money to put weigh
stations in Mexico, the most creative approach to any RMA in the
state of Texas.

We have had a vote on the southern relief route and it went through
nine to three, and the issue, interestingly enough, was not tolls
because everyone that is going to come talk to you here today is on
the record for supporting tolls, in some manner or another, they
support tolls. The project that we're talking about has two tolled
lanes and four free lanes, so a truck or someone on the east side of
town can have the choice of being in the fast lane and pay a toll or
being in existing lanes on I-10, or the Border Highway, and get
through our community.

With the growth that we have ahead of us, here's the basic choice
for El Paso: we can use an RMA to finish our inner and outer loops
in a decade, or we can reject an RMA and finish our inner and outer
loops in a lifetime. We're the only Texas city that does not have a
completed inner or outer loop of over 500,000. And when you think
about what has to happen in El Paso, Texas, top priority -- and
we've been talking about this, Mr. Chair for many hours -- the top
priority for an area that's been as lucky as we have to get Fort
Bliss, has got to be to finish our loops.

So that's the simple choice in El Paso, Texas: you do it, you take
the $100 million that the RMA is going to generate of new money, you
finish your loops in a decade, or you don't do it and you wait a
lifetime. And the question is what does that do to El Paso if you
don't do it, and I think the choice before us is as clear as any
community in the state.

The City of El Paso has done everything it needs to do legally to
make this happen. The project that has been voted on is the only
thing that federal law requires to be voted by the MPO, and so the
question is will our community seize its destiny by having an RMA to
essentially double the transportation money in our region. That's
the question before us today.

And I've been coming here for a long time, and I'm pleased to see
great commissioners, particularly from our area of the state,
participate in this discussion. But we've spent a lot of time fixing
up these tools for every community to come and say this is how we
want to seize our destiny and get this thing done and no community
in Texas will be better off than El Paso, Texas with an RMA.

MR. WILLIAMSON: It's always good for you to be here, Senator, and
you know you're welcome here.

Members, the senator will have to leave, and so if you need to
dialogue with him now, this is the time to do it.

MR. HOUGHTON: I'll go last.

MR. WILLIAMSON: I'll be brief, Senator. I think it's safe to say
that each of the four commissioners are very uncomfortable being
placed in the position of having to mitigate what we perceive to be
a disagreement in the western district of the state. I think we
understand, based on the information our staff has given us, why the
disagreement occurs, but I think we're uncomfortable, I think it's
honest for us to say that.

But I also think that I'm an appointed guy and you're an elected guy
and it's not my role to lecture you or Mr. Pickett about your
business -- in fact, I'll never do that, in fact, I'll never argue
with you publicly. You can say the nastiest, vilest, meanest things
about me in the press you want to and I'll never say a word because
you're an elected guy and I'm an appointed guy, and when I was an
elected guy, I didn't like it when an appointed guy argued with me,
and so I ain't going to do it.

I know you're headed back home. I want you to head back home knowing
that all four of us are going to listen to what everybody has got to
say today, we're going to ask our staff a lot of questions about the
history of certain laws, and we're going to try to reach a judicious
decision about what's best from our perspective. But I've got to
tell you we're not comfortable in the position we're in right now at
all. And that's all I feel like I need to say.

MR. HOUGHTON: Well, I wanted to tell the senator just generally
thank you for your vision on transportation, and your support of
this commission, 2702, 3588. You've had that vision. It's obvious
now, with the RMAs that came before us earlier in the day, they're
utilizing all the tools in the toolbox: tolling, pass-through
tolling, Prop 14. They're going through those and they're
integrating all of that in the planning, and with your help, again,
that was made possible, and thank you for that from this
commissioner and from the commission.

MS. ANDRADE: Senator, thank you for your leadership, and I'm so glad
that the chairman brought out the discomfort because we don't like
to get in the middle of communities and we enjoy when a community
comes so united because we're all trying to do what's best for the
state. And I come from a community that's taking advantage of every
tool in the toolbox and I see what can happen, and when you say you
want to seize your destiny, you want to get your loop done in a
decade versus a lifetime, I have a hard time understanding what the
disagreement is. So I just wanted to let that out.

Thank you for your leadership and I hope that we do what's right for
your region and for this state because El Paso is very important.

SENATOR SHAPLEIGH: Well, Hope, I love your name and I hope you leave
us with hope when we leave here. Your community is very similar to
ours: you have military bases, you've got rail going in five
directions, we've got rail in five directions -- that's a big
blessing in today's world -- you've got freeways coming in and out,
north, south, east, west. And those communities in today's world
that make mobility happen are the ones that win, especially if
you've got a military base.

And I do hope that we arrive at a point. We thought we were there a
month ago with a fair degree of consensus with maybe one or two
critics. I think there's an issue in El Paso where you've got a
state next to you that has a different constitution. I would hope
that they would let us evolve our own destiny and not participate in
the kinds of things that are under our state law and constitution.

But when we look at communities in the future in this state and you
look at the choices San Antonio has made at Kelly, the redevelopment
of Kelly, the inland port concept at Kelly, the rail that you're
focused on now to move goods from Monterrey right up to San Antonio,
the freeways that you're putting in now, the rapid growth of your
technology sector, you are what we hope to be someday. And I'm
hoping that those listening to you will reflect on the lessons that
you give us because San Antonio offers a lot of lessons for El Paso,
Texas.

The great thing we have going for us, we've got a decade of the best
growth in Texas, and we are going to be judged on how well we manage
it, and if today passes without getting an RMA, we will rue the day
that we didn't seize the opportunity to move people, product and
troops faster, safer and more efficiently.

MR. WILLIAMSON: John?

MR. JOHNSON: Senator, it's always good to see you, whether it's here
or in El Paso. I'm an idealist, a dreamer in a way, and so I think
to amplify a little bit on what Ric said that we hate to put our own
personal selves in what we view as a family feud. I mean, these
things are called regional mobility authorities for a reason, and as
the dreamer in me wants so much that there be harmony or at least
consensus of harmony, there's another side of me that says, as you
well pointed out, you have a very legal right to follow through on
this, it's in the law, and you have every right to do that.

So that's the dynamic tension that I'm struggling with and I want to
hear what the other people who want to give discussion or testimony
on this issue have, but I think you can sense that's my personal
feeling. I think we're all subjected to those close of competing
thoughts. Appreciate your involvement in transportation around the
state, and it's not limited just to your area, it's statewide, and
your interest has been sincere and over the last almost eight years
I've enjoyed working with you.

SENATOR SHAPLEIGH: Thank you.

MR. WILLIAMSON: Thank you, Senator.

SENATOR SHAPLEIGH: Thank you, Mr. Chair.

MR. WILLIAMSON: I think the closest equivalent I've got to the mayor
would then be the county judge-elect. Mr. Cobos, I think if you
don't mind, I'll let you lead off the other side, and we'll ask Mr.
Pickett to follow as we asked Mr. Shapleigh to follow the mayor.

MR. COBOS: Thank you. Good afternoon, Mr. Chair, commissioners. My
name is Anthony Cobos, county judge-elect, County of El Paso, Texas.
It's an honor to be here to discuss RMAs and the impact they're
going to have on our community.

There are six municipalities within the limits of El Paso County,
nine school districts, the county of El Paso abuts New Mexico. I
served as an El Paso city councilor for eight years, I represented
the district that abutted New Mexico. New Mexico, Sunland Park is
building a port of entry that will use El Paso roads to get to I-10,
so New Mexico's opinion is extremely important and very valuable on
this issue.

I'm the only elected official who will come before you today who
represents the entire county of El Paso. I just got off the campaign
trail, knocked on a lot of doors, visited with a lot of people, and
the opinions, the consensus that I heard was people are concerned,
they're not trusting and they need more time on this RMA issue, and
toll roads. Toll roads is one component of the RMA.

I had the honor of serving with our excellent mayor, John Cook, for
four years. He's a man of integrity, I respect him very much, and
I'm just glad I didn't come up after he sang that song because I
would have had some big shoes to fill, but we disagree on this
issue. I don't believe that the public comments have been
significant, that they have been appropriate. When you have two
public meetings, you have 15 people in favor, five against and you
get eight letters for, one against, that's hardly reflective of the
opinions of the people in El Paso County.

And you all are in a very difficult position. What you're being
asked today is to create an RMA in the city of El Paso where there
is much controversy on this issue. El Paso is very divided on this
issue.

I was impressed, item 6 (c) you had Cherokee County, Harrison
County, Rusk and Upshur that support this. It was said that the
chambers of commerce support joining an RMA, the county judges
support joining an RMA, the MPO supports joining an RMA. You don't
have that in El Paso County. The MPO voted against. You can jazz it
up however you want, they voted against a resolution creating a
regional mobility authority. We need more time.

If you vote for this RMA today, you're going to be fanning the
flames, you're only going to be adding to the controversy. We're all
going to have to go back to El Paso, we'll remain divided, the
opposition will continue to grow, it won't be a good thing if you
vote for this today.

If you vote against it, we can go back, we can reconcile, we can
discuss it, we can come back to you next time, if appropriate, if we
so decide to come back as a united voice, as a united county. And I
would ask that you vote against this because I would love to see the
headlines in tomorrow's paper reading: The Texas Transportation
Commission voted against creation of an RMA to give El Pasoans more
time. I would hate to see a headline that read: The Transportation
Commission voted for El Paso because they couldn't agree on it.

MR. PICKETT: Always a pleasure. I'm going to say a few things that
are off the subject, so hopefully you'll at least remember what I
said because everything else I'm not sure.

Going back to Randall's presentation about Eisenhower and the 50th
anniversary of the highway, a fun fact for you to remember there
involved in transportation, Dwight also realized when the Autobahn
was being built by the Germans, they had airplanes stashed along the
Autobahn at various locations, and Dwight decided that when we did
this highway that there would have to be certain sections that were
absolutely straight for a specific distance so that the United
States Air Force could land or take off on this highway. Just
thought I'd throw that in.

Now, since that's the only thing most people will remember, let me
start the other. I too must respectfully disagree with the mayor and
Senator Shapleigh. Jim that was here -- and I apologize, would you
apologize to Jim for me, I'm going to use him as an example -- after
about the third or fourth time Jim got up, most of the people in the
audience -- I won't say the committee, we've all been there -- kind
of tuned him out. If he said something a little different or funny,
we laughed, but we knew where he stood, we've heard it over and
over. And the mayor was trying to make a point that the public is
supporting this because of the meeting held June 12. The public in
El Paso was tired of the issue by June 12, they had enough.

I had been personally to I don't know how many meetings and invited,
and if you want to see numbers or show numbers -- and I don't want
to put any of your staff on the spot -- at one particular meeting on
the east side in a police station that I was invited to speak to
along with TxDOT, and I didn't start this, I didn't ask for this to
happen, at the end of the meeting after all sides were debated,
someone said would someone do a show of hands who would support
this, one hand went up, one, and there was over 50 people there, one
hand went up. But those other 49 people didn't go to the subsequent
meeting on June 12, they'd had enough.

This is the only place in Texas that Texas Department of
Transportation spent $100,000 on buying commercials selling a
product. It was no longer outreach. In the past it was we're going
to have a public meeting on June 12, come on down. This was if you
don't use a toll, you won't have to pay. Well, wait a minute, is
that absolutely true?

In the action that was presented to the MPO last month, a lot of the
members didn't realize until afterwards -- and that's why the
subsequent vote last Friday -- that this is going to cost people who
don't use a toll. In that action the month before, money was deleted
from projects that the people in El Paso are expecting; the people
from El Paso are expecting $80 million to be in the Northeast
Parkway. That's no longer there, that was taken out.

So go back to the June 12 meeting and hold it again and say are you
for an RMA if we delete $80 million out of Northeast Parkway, will
you be for the RMA if we delete the money out of widening Interstate
10 on the west side. Let's be fair about this, let's go back and
give them all those choices.

The senator has brought this up before and other people and they're
trying to make me feel bad that I voted for 3588 and 2702. I thought
transportation folks would be glad I voted for those, I'm proud of
voting for those, but he uses it that he was proud but because I
voted for it, it's a bad thing. Of course I voted for those things,
they're great tools.

And Senator Shapleigh's Senate version must be different from the
House version, though. I don't remember anywhere in 3588 or 2702
that says the law says you have to create an RMA, I believe it said
here are the options, try this one, try that one, you all decide in
your community what works, what doesn't work.

This is one of the few places where we can discuss in detail and
people can follow the conversations. In El Paso it's gotten down to
are you for or against tolls, and that isn't the issue. I know TxDOT
has got a copy, I don't know if you've looked at it yet, Friday's
proceedings. I thought it was pretty good discussions. We had some
people say I'm against tolls, on the board and in the public; we had
some people on the board who voted no to creating an RMA say I'm not
against tolls, I'm against the RMA. So it was refreshing to hear
that some of the information has started to get out at least and
even some of our own board members are now splitting this and saying
it's not a one issue deal.

And it's in the record we've been told that pass-through financing
was for small projects, and every month I'd see you guys approving
-- and gal, sorry -- projects in the multi-million dollars, and said
why is it only a small for El Paso, why can't we do a big one, and
then somebody proposed an unsolicited proposal and that you're
wrestling with whether that's a good thing or not. I hope you
support that, I support that on the record again. It's not new
money, but is it one of the tools? Yes. Is it trying to fill in the
gap? Yes, absolutely.

So when the mayor said that the public supports this, that is not
the case, in my opinion, it is not the case. I thought we were done
with this. I keep getting asked to go places, we want to understand
this. Another one? They've already made up their minds.

And when you go to these outreach meetings, the first thing that
TxDOT does is put up a graphic and they've got this oval and the
center of the universe is the MPO, and they've got a little bullet
off there that says RMA and a little bullet that says TxDOT. Well,
the center of the universe last Friday said no. It doesn't matter to
me whether you're going to quote verse and chapter, there's a lot of
time when we pass laws as human beings, those technicalities. I was
asked from the attorney general just a week ago: Would you tell me
what your intent was on this amendment, Representative Pickett,
because we're having some questions about what was your intention,
so even though that statute is there, what was the intention?

So the mayor is saying because technically he doesn't have to get
the MPO's permission, or technically the MPO didn't say no, they
just rejected the resolution, put it on next month's agenda as an
item: Do you support or reject an RMA? Okay, we'll see if everybody
can go garner their votes and see what happens then at that point. I
do believe that the people who voted on our MPO board said no to the
RMA, they just didn't reject the resolution at that point.

The county judge is here saying that he, as a newly elected
official, isn't wild about this. Our congressman -- and I got credit
for writing the letter and it was a pretty good letter -- the
congressman weighed in from our area and he said he is not in
support of an RMA. He didn't say he wasn't in support of Chapter 43
or line 26, he just says I am not in support at this time -- I'll at
least put that caveat in there -- I am not at this time supporting
an RMA. And I believe that he thinks he has the pulse of his
constituency, as I hope I do, I know the mayor does, I know Senator
Shapleigh does.

So it is tough for you, no one likes to be in this position of
splitting the baby. But I would tell you that you already know the
facts: if you deny this request for an RMA, that does not preclude
that from happening in the future, that does not preclude us from
doing tolls. I do take offense from the way this was presented in my
community, I take offense to the way the public was basically told
that this is how it's going to be without both sides of the
argument.

And I do believe there is a place for tolls. I'm fine with that
being on the record; I have a plan that would include tolls. We've
got a great MPO staff, one of the best in the nation, and we can
come up with a good proposal.

If you were to poll all the members that were present last Friday,
again, just a straw poll, do you absolutely realize what was adopted
as a southern relief route? And I don't want to embarrass my
colleagues, but a lot of them came to me afterwards and had no idea
of the detail that was in there, they didn't know. And you can say
that's an excuse, they should know, but there is trust. I know that
the county judge says there's some mistrust, and that is true, but
there's also some trust, and when somebody from TxDOT gets up and
it's a friend of yours and somebody that you've known for a long
time and they offer you a bottle of water and a nice little table
for you to pick up a key chain, there's a lot of trust there and
there's a lot of people trusted you all in what you are presenting,
and I think you abused that. And I think it's time that we try to
trust each other.

And I did agree with the judge's comment about fueling the fire on
this issue. You said the MPO is the center of the universe, the MPO
said no. If you violate that trust, you'll have to go back and tell
all those people at those outreach meetings, public hearings that
what we put up there was not what we really meant. That's it. Thank
you.

MR. WILLIAMSON: Thank you, Mr. Pickett.

Richard, we're going to be for and against, for and against.
Richard?

MR. DAYOUB: Good afternoon. For the record, I am Richard Dayoub,
president of the El Paso Chamber of Commerce.

Chairman Williamson, Commissioner Andrade, our El Pasoan,
Commissioner Houghton, Director Behrens, Mr. Polson, thank you so
much for this opportunity to speak to you this afternoon. I'll do my
very best to respect your time by being as brief as possible.

MR. WILLIAMSON: We reserved the day for El Paso, so take your time.

MR. DAYOUB: The whole day? I think we have a flight at five o'clock,
so we're at least assured of being out of here by that.

First of all, let me thank you all for participating in last
evening's event. It was our pleasure to host you and we look forward
to hosting you in El Paso in late July.

With me today are several people from El Paso, business people
mostly who support this initiative to move forward with an RMA, and
I'd to recognize a few of them by name but I'd also like all of them
to stand and be recognized who are here. Paul Foster, representing
Western Refining; Stanley Jobe; Veronica Callaghan; Terry
Bilderback, who is the chairman of the chamber's transportation
committee, as well as he serves on the mayor's transportation
cabinet. If I've left anybody out, I certainly apologize for that,
but if you would just be recognized so that everyone does know that
you're actually here.

MR. WILLIAMSON: Welcome.

MR. DAYOUB: My comments, while brief, are reflective of and are
supported by our nearly 1,300 members in El Paso. Our membership
reflects the diversity of our population. We are 80 percent
Hispanic; 85 percent of our members are small business with fewer
than 20 employees; they are situated across El Paso.

For those of you not intimately familiar with El Paso, our city
spans nearly 30 linear miles across the community, east to west,
with I-10 intersecting throughout our community. And I-10, I might
add, not so ironically maybe, a few weeks when we came down for the
first Annual Transportation Conference, one of our leaders, Terry
Bilderback, missed his flight -- and I think this is somewhat
humorous today -- because he was stuck on I-10 because of an
accident and he couldn't make his flight on time. Had we had our
southern relief route completed, that would have been a non-issue.

MR. WILLIAMSON: But the record will reflect all of us use that
excuse every day for why we're late.

MR. DAYOUB: That's precisely right.

MR. WILLIAMSON: In Texas it's the greatest excuse in the world
because we're all always late.

(General laughter.)

MR. DAYOUB: That's very true, sir. Thank you for pointing that out.

We are in El Paso, as has already been pointed out by our mayor and
by our state senator, we are a growing community, and while the
numbers seem to vary and sometimes perhaps exaggerate, we are, in
fact, in a major growth mode. The chamber was the lead organization
in helping to recruit the growth of Fort Bliss, and while we spent
some seven or eight years diligently laboring in that arena at the
Pentagon and Washington, with the help of our congressman, I might
add, as well as our senators, Cornyn and Hutchison.

We thought that was a lot of work, but it pales in comparison to the
work we have before us today as we prepare our community for the
receipt of those many thousands of soldiers and their families and
the other growth that's occurring around Fort Bliss, as well
separately from that, the manufacturing community across the border
in Ciudad Juarez.

We have roughly 350 Fortune 500 manufacturers and many of them in a
growth mode to the point where the unemployment rate in Ciudad
Juarez is almost virtually zero, it's lower than 10 percent. They
are cannibalizing each other in trying to recruit employees. They're
recruiting across the country to bring people to El Paso, to live in
El Paso and work in Ciudad Juarez, all of it adding to our burden on
our bridges, our already over-burdened bridges.

As is stated in the folders that I provided to you, the Greater
Chamber supports House Bill 3588 and all of the tools provided
within, including the formation of an RMA. It was stated that the
position in our community is not so much supportive of the
formulation of an RMA, and I respectfully disagree with our elected
officials who have opposed this. I think our 1,300 members speak
otherwise. They're all over the city and they are facing challenges
getting their goods and services across the community as it
continues to grow.

And one of the great things about our great city has been under our
quality of life initiatives for a number of years we've had the
pride of stating that we are one of the least congested communities
in the nation, major communities. That can no longer be said, and
certainly if the RMA is not approved, in the near term we will not
be on that list any longer, to our great disappointment.

Now, Fort Bliss cannot speak on their behalf because they are
prohibited from lobbying initiatives, but I can speak to the
initiatives that we work with them constantly. I'm at Fort Bliss
almost as much as I'm at my office, and they are constantly
concerned about the infrastructure needs that we have, and perhaps
our inability to continue to meet those needs, and they look to the
chamber and they look to the business community to help facilitate
those processes.

We have a rare and unique opportunity to prepare our community for
this growth, most importantly by providing transportation
infrastructure ensuring the exceptional quality of life for El
Pasoans and what they currently enjoy. Part of that quality of life
is the ability to navigate our roads without the congestion normally
synonymous with large metropolitan areas.

It was my hope that today I would address you as a part of a group
that's considered a team and finding ourselves in consensus. That,
unfortunately, is not the case, but I will tell you that
irrespective of your decision today, the chamber and myself, as a
spokesperson for that organization, will work diligently with our
elected officials, both in support of this and opposed to this, and
hoping to find a unified voice coming before you.

I was captured earlier, as I listened to our friends from
Brownsville and Cameron County, to speak of their partnerships and
to speak of their successes, working with Mexico, working with Union
Pacific Railroad. We have similar challenges in El Paso. We have the
Union Pacific, we have Southern Pacific, we have Burlington
Northern, and we also have them stacked in the middle of our
community running parallel to our Interstate 10. So we have the same
challenges that they face, but I was particularly impressed by the
fact that they've taken an approach utilizing the tools of the RMA
and working on those solutions and how to move the railroad
transportation process out of downtown central which is a challenge
we are facing as well.

I attended the first Annual Conference hosted by the Transportation
Commission, and while there were many good things that came out of
that and I learned a lot, I was particularly struck by the address
by Secretary Mineta as he gave the keynote address at lunch, and I
thought he was extremely eloquent. And what he basically touched on
was we can no longer afford, if we are a growing community, to
address our needs in transportation in the fashion that we've always
done in the past. To do so is to put ourselves at risk.

The phrase that comes to mind to me, and we use it probably too
often: If we always do what we've always done, we will always get
what we have always gotten.

I think I was brief, I hope I was brief. I am available for any
questions or comments. I thank you all again, on behalf of the El
Paso Chamber of Commerce, for your time.

MR. WILLIAMSON: Don't leave. I think we're going to do questions and
comments after we hear from everybody. Thanks.

Council Member Lozano.

MR. LOZANO: Good morning. Of course, our regional mobilities are
regional, it doesn't have any borders. Anyway, I'm Jose Alejandro
Lozano, District 3; I represent 77,000 citizens in El Paso. And of
course, with all due respect to Mr. Richard Dayoub, he represents
the great citizens, business owners of our community which I
respect, Mr. Paul Foster, Mr. Stanley Jobe, and many others that
really provide a lot of good to our community.

But it's about our community in general, Honorable Chair and
commissioners. Every Tuesday we sit in the chambers in El Paso and
hear the requests of citizens, their cries, their hurts, their
situations, but many times we only hear them and we don't listen to
them, we just do what government wants many times. And this is about
our citizens in general, all of them, the region: New Mexico, El
Paso, the surrounding communities, Ciudad Juarez. We have to work
together. Today I hope that you listen to our concerns.

I agree two weeks the vote of the MPO for the RMA. You have to
remember there was 15 elected officials in that commission, the
other ones are city employees, and I have a problem with that. Out
of the 15 elected officials, eleven voted no, only four elected
officials voted for it. These are the voices of the citizens of the
community of El Paso, of the whole county, all the mayors and the
representatives.

Today I will also ask you don't take any action today. We need to
work out our differences, we need to go back to El Paso and maybe
consolidate the MPO and the RMA and make it elected officials, by
the whole community, by the whole county, and be members of the
voice of the community, the elected officials. We need citizens to
be responsible and responsive and accountable to the voters of this
great state.

Thank you very much. I'm against, of course, you know; if you cannot
take any action.

MR. WILLIAMSON: Thank you, sir.

Council Member Ortega?

MR. ORTEGA: Good morning, commissioners, Chair Williamson. And a
special good morning to Ted Houghton, who I want to thank all that
you've done for the city of El Paso and the great state of Texas. I
happen to represent Mr. Houghton on the El Paso City Council, and I
support the RMA.

And just taking a look at the tenor of the debate, I feel it's come
down to whether or not the MPO is a proxy for public support, and I
will submit the answer to that is no. There are 15 elected officials
on the MPO but the way that I view the selection process, a lot of
times the government leader, and in our case the mayor, will select
which council members sit on the MPO. For the city of El Paso, in
our case we have three selected in addition to the mayor. This can
be manipulated and it can be manipulated with the other government
entities in El Paso County as well.

The sponsoring organization here is the City of El Paso and the
eight representatives and the mayor were all publicly and properly
elected by the citizens of the city of El Paso. Of all the elected
officials that sit on the El Paso City Council, you have six of the
nine public supporting the RMA, two-thirds of the city council
publicly supports the RMA. We're held accountable to the citizens
that we represent. We have spent a lot of time going out to the
community.

I think if you take a look at some of the measures that have been
taken in El Paso, we've exceeded the requirements, we've exceeded
due diligence and community outreach, and I think there's something
to be said for that. Some of the elected officials have said, Well,
let's wait for there to be community consensus. And if you take a
look at the history of El Paso and the politics in El Paso, if you
wait for community consensus, you'll be waiting forever, it's not
going to happen. I think the time to act is now.

We've had the senator, we've had the mayor state the burden that El
Paso is now facing with increased population from Fort Bliss which
is artificially induced, and you also have a very high natural
population increase. El Paso is the 24th fastest growing city in the
United States of America and our transportation infrastructure needs
are not being met.

So in asking and questioning these issues of community support, I
would ask you to take a look at the makeup of the council members,
take a look at the support from the mayor who was properly elected
by the citizens of the community, who is held accountable to those
folks, and I think there is public support for this.

I'd finally just say a couple of comments were made concerning the
discomfort, and I will be the first to agree. Going out to the
community initially and talking about the RMA, there is a lot of
discomfort, there's no doubt about it. At the beginning of the
meeting we had a presentation on Dwight Eisenhower and the national
transportation network that he embarked upon, and I'm sure he had
discomfort too. But after doing due diligence, I think we've done
our due diligence, after you take a look at the arguments that have
been made, I hope that you will find that although there is
discomfort, at the end of the day it's the right thing to do.

And so I, for one, am asking you for your support on this petition.
Thank you very much.

MR. HOLGUIN: Mr. Chairman, honorable commissioners. I'm Eddie
Holguin, Jr., city representative for the Mission Valley in El Paso,
Texas. I'm here to speak on behalf of the 77,000 people of my
district that I represent on the important issue of regional
mobility authority.

To date, the members of our very own regional metropolitan planning
organization, our state delegation, the bulk of the cities in the
region, as well as county elected officials oppose the
implementation of a regional mobility authority. Frankly, we agree
with those that have serious concerns about the impact of
implementing an RMA. Regarding the accountability of a new
government, my constituents do not want an RMA and they completely
reject the idea.

Do not misunderstand, El Paso wants to move forward with important
projects and we'll explore every avenue of financing, however, we
feel an RMA at this time is not the right vehicle for our region, it
will not help us go where we want to go. We want to keep the maximum
flexibility with maximum accountability, but we need taxpayers and
voters in control of the process and their decisions. We do not need
an authority with potential conflicts of interest and little local
accountability.

Today you will hear and you've heard from some elected officials
that purport to represent the majority of our region, and make no
mistake, they do not speak for the people of El Paso. Every poll
that has been conducted shows clearly that the people in El Paso do
not support an RMA.

Furthermore, my own view is that we must let the people decide; the
decision should not be in the hands of a few but in the discretion
of the many. That is the American way. Allow our people to vote for
or against an RMA. Most of the elected officials already have and
we've said we do not want one. So if you're not going to listen to
the elected officials, then let's listen to the people of El Paso.

Texas has always demonstrated its independence and our history is
one of fighting tyranny. Let's respect the democratic process, and
on behalf of the 77,000 people that I represent, I respectfully
request that you do not approve an RMA for El Paso today.

MR. WILLIAMSON: Thank you, sir.

Now, Hope, we have to make a decision. It's 1:15, we have a variety
of public transportation matters we have to take up, I know that you
want to take them up with public transportation persons who are here
to participate, I know they're going to take longer than 15 minutes.
Do you wish for us to lay this matter aside for a moment and proceed
with that, or do you wish to proceed with this which I judge is
going to take probably about 45 minutes, or would you rather me just
make the decision and take you off the hook?

MS. ANDRADE: Mr. Chairman, I would like to participate, and my
concern also is that I have to take the staff with me. So if it's
all right with you and if you think we can take care of this by
1:40, I'd like to take care of those issues.

MR. WILLIAMSON: The El Paso or the PTN?

MS. ANDRADE: PTN. And then come back and it might be that we'll
still be in the El Paso discussion.

MR. WILLIAMSON: I think it will be about 45 minutes of El Paso.

Okay. Well, Mike, I want to rest on this matter for a moment to give
all the members a chance to kind of digest what they've heard and
form their questions, and I want to move to the first PTN item on
the agenda.

MR. BEHRENS: That would be agenda item number 8, and this we're
talking about public transportation and looking at awarding the
various federal programs that are available for funding. Eric?

MR. GLEASON: Good afternoon. For the record, my name is Eric
Gleason, director of the Public Transportation Division for TxDOT.

This minute order authorizes the allocation of $5,682,411 of Federal
Transit Administration Metropolitan Planning Program funds, Section
5303, and $1,666,210 of State Planning and Research Program funds,
Section 5304, for public transportation.

Section 5303 funds are allocated using the latest census data so
that metropolitan planning organizations receive funds based on the
ratio of each MPO's population to the total population of all MPOs.
They are used to support a variety of activities, including
management and economic feasibility studies, evaluations of
previously funded projects, development of transportation plans,
TIPs and other related activities preliminary to and in preparation
for improvements to public transportation systems, facilities and
equipment.

Section 5304 funds are used to offset eligible department
administrative expenses and to provide financial assistance for
planning support in a variety of ways in a variety of different
areas throughout the state, either by department direct expenditure
or grant award. And should grant awards be needed under this
program, those awards will be recommended under a separate minute
order.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, members.

MR. BEHRENS: 8(b) will be concerning federal funds that are
available for Job Access and Reverse Commute programs, and Eric will
make a recommendation on that particular program.

MR. GLEASON: This minute order authorizes the allocation of Fiscal
Year 2004 U.S. Department of Transportation funds for Job
Access/Reverse Commute -- what we call JARC -- projects for
transportation operations, administration and capital for colonias.

In 2004 the department received a congressional earmark totaling
$2,379,023 for JARC for colonias projects. These funds were to be
used to establish transportation for colonias residents for access
to employment, job training and childcare. Following receipt of the
earmark, the department conducted a comprehensive outreach process
with local stakeholders and potential partnering agencies to
determine the best use of the requested funds.

Additionally, in February of 2005, the commission expressed its
intent to award up to $1,104,000 in toll credits, known now as
transportation development credits, for vehicle purchases associated
with projects under this grant. Project awards are based on
identified needs, the extent to which projects address these needs,
documented level of coordination between human service and
transportation planning, and documentation of financial commitments.

A contingency list is established, and should funding de-obligations
in the corresponding transportation development credits become
available, funds will be offered to the agencies in the order in
which they are listed.

We recommend approval of this minute order.

MR. WILLIAMSON: Do we have witnesses?

MR. BEHRENS: No.

MR. WILLIAMSON: Members, I'm going to have one question. You've
heard the staff's explanation and recommendation. Do you have
questions?

MR. JOHNSON: I have one. Eric, there's some specific recipients
named for the JARC projects. Is that correct?

MR. GLEASON: That's right.

MR. JOHNSON: And then there's some others that are not on the
recipient list but are named as I'll call them alternates. Is that
correct?

MR. GLEASON: Contingency list, yes, sir.

MR. JOHNSON: Is the contingency money distributed pro rata, or is it
distributed on a first, second, third, fourth basis?

MR. GLEASON: We have proposed to distribute it on a first, second,
third, fourth basis. The order in which you see the contingency
list, that would be the order in which, as funds become available,
we would distribute those funds.

MR. JOHNSON: So is Brownsville the first alternate, if that's the
appropriate nomenclature?

MR. GLEASON: That's correct.

MR. JOHNSON: All right. Thank you.

MR. WILLIAMSON: I'm sure, members, you've all been contacted, as
have I, by certain House and Senate members particularly concerned
about, I think, the McAllen position.

And I think we're sometimes criticized for this but we put a great
deal of trust in our staff and we have no less trust in you than we
do anyone else on our staff. We believe that we approach things
correctly and we think you've approached this one correctly.

I think the message we want to send from the department is we want
everybody to be able to compete for these things and we have
observed that your application perhaps isn't as strong as it should
be and we want to reach out and help them in future applications so
that they can compete. And I don't want you to hesitate to tell us
what resources you need to do that because I think it's pretty
important.

MR. GLEASON: Okay.

MR. WILLIAMSON: And I know that you think it's important as well.

MR. GLEASON: Yes, sir.

MR. WILLIAMSON: As I said to one of my friends in the legislature, I
wouldn't want you to think that your community was ignored because
it was your community, we're just very competitive here now at TxDOT
and we do things according to a competition-based decision-making,
and maybe we need to help out some parts of the state compete
better. Tell us what you need to help get to that spot.

MR. GLEASON: Okay, sure.

MS. ANDRADE: Mr. Chairman, and I want to echo that, and thank you
and the commission for the support, because we did have some new
ideas and I think that we're on our way to make the most of the
monies that we have, but we are committed to reaching out to those
communities and helping them when they apply for these grants. So
we'll work closely together. Thank you very much.

MR. GLEASON: Yes, ma'am.

MR. WILLIAMSON: Any other questions or discussion with Eric on this
item, members?

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, members.

MS. ANDRADE: Thank you.

MR. BEHRENS: Now another item that pertains to public transportation
will be in our rules and this will be Rules for Final Adoption,
agenda item 9(b)(2), and these rules pertain to our formula programs
for some of our programs in Public Transportation. Eric?

MR. WILLIAMSON: Another non-controversial topic taken up by the
Texas Department of Transportation.

(General laughter.)

MR. BEHRENS: If you would lay those out, please, Eric.

MR. GLEASON: This minute order adopts amendments concerning the
Public Transportation state allocation formula and federal grant
funds. These amendments affect state funds allocated to small urban
and rural public transportation providers and Section 5311 federal
funds for non-urbanized area or rural area public transportation
providers.

A public hearing on the proposed amendments was held on May 4, 2006,
and during the comment period we received comments from three
sources focusing on the following areas proposed for amendment:

An increased emphasis on performance. There was some expression of
support for this while others highlighted the need for consistent
and reliable data and raised concerns over the diversity of rural
system operating environments and the validity of comparison among
those systems. We have engaged the services of the Texas
Transportation Institute to address the quality concerns and believe
that the mix of performance indicators included in the rules address
the concerns about varying operating environments.

The second area of comment on the proposed amendments went to the
proposal to eliminate the transition period that is called for in
the current rules. The rules support the desire to continue to
minimize the impacts of dramatic swings in funding by establishing a
no more than 10 percent reduction cap from one year to the next for
any individual provider on a permanent basis.

And finally, there was support for establishment of funding tiers
within the state urban program that are proposed.

Additionally, a number of comments addressed portions of the
Administrative Code not proposed for amendment, and no changes to
the rules were made as a result of these comments.

The Public Transportation Advisory Committee met on May 19, 2006
following closure of the public comment period, and by motion
recommended adoption of the amendments. We recommend your approval.

MR. WILLIAMSON: Members, you've heard the explanation and
recommendation. We have three witnesses, with your permission. I
think we'll take them -- since I don't have clear guidance -- in
alphabetical order. Ben, you're first.

MR. HERR: Good afternoon, Chairman Williamson and members of the
commission. For the record, my name is Ben Herr. I'm executive
director of the Texas Transit Association. The Texas Transit
Association represents the 77 transit operators in the state, to
include the metros, the small urban, and the rural operators. In
addition, we have over 50 associate members such as manufacturers,
consultants and management companies that support the transit
industry in our state.

I'm here this afternoon to convey Texas Transit Association's
support of these new funding formula rules. I would like to thank
the members of the commission for providing the leadership and
direction to ensure that the transit providers have a well defined,
well researched funding formula that will provide an equitable
distribution of both state and federal funding.

I would especially like to thank the staff from TTI, the members of
the PTAC, and the Public Transportation Division for their hard work
and dedication to improving upon previous versions of the funding
formula and coming up with a version that has drawn relatively few
complaints and voices of concern from the transit community.

Yesterday, Eric Gleason announced at the PTAC meeting that the
department has contracted with TTI to conduct performance measure
training verification. This is extremely good news and I thank the
department for taking this approach.

During the rule-making process, several transit operators expressed
to me their concern about the accuracy of performance measures and
the impact this would have on their future funding. The department
has taken a proactive step in the right direction by contracting
with TTI to assist with ensuring accurate and reliable performance
measurements.

I believe that this contract will help to reduce some performance
measure anxiety and will help to provide a level playing field for
all the transit operators affected by the increasing emphasis on
performance measures.

Once again, I'd like to thank the commission for its support of
transit providers. Public transportation provides a valuable service
to the citizens of Texas and the transit industry is a strong
contributor to the department's five stated goals, especially in
transit's ability to help reduce congestion, expand economic
opportunity, and improve air quality.

MR. WILLIAMSON: Very good.

MR. HERR: Thank you for all that you do for transit and thank you
for giving transit the opportunity to contribute to the department's
goals. The Texas Transit Association would like to recommend the
commission approve this minute order. Thank you.

MR. WILLIAMSON: We thank you, Ben. Are there any questions of Ben?

MR. HOUGHTON: I think Ben gets a bonus for that. Right?

MR. WILLIAMSON: Absolutely.

(General laughter.)

MR. WILLIAMSON: The closer we can weld public transit to building
highways, to building roadways, to building steel roads, the better
off we all are. Everything is transportation.

MR. HERR: Thank you, Mr. Chairman.

MR. WILLIAMSON: Thank you, sir. Ken Smithson?

MR. SMITHSON: Good afternoon, Mr. Chairman, members of the
commission.

MR. WILLIAMSON: How are you doing?

MR. SMITHSON: I'm fine, thank you. My name is Ken Smithson, I'm the
general manager of Easy Rider in Midland-Odessa, and I just wanted
to thank you for your consideration of this item today, and your
support of public transportation in general. I also appreciate the
stature that you've afforded to the Public Transportation Advisory
Committee and the value that you place in their recommendations.

I got to sit in on one of the workshop sessions held earlier this
year at the local district office, facilitated by the Texas
Transportation Institute, on the funding formula, and I really
appreciated that opportunity as well. I thought that was very
beneficial, and those were held in many places across the state.

I think the proposed funding formula is a big step forward in
establishing a more equitable distribution of limited dollars, and
it appropriately places greater emphasis on performance indicators,
including greater investment from local governments rather than
exclusively relying on federal and state resources.

So I appreciate your consideration of this matter.

MR. WILLIAMSON: That's kind of you. The statute is elevated because
of the class and aplomb with which Commissioner Andrade conducts
herself. She lifts us all.

MR. SMITHSON: I agree.

MR. WILLIAMSON: Has anybody got questions, comments?

MR. HOUGHTON: I got to ride in one of their buses in Lubbock last
week -- not Lubbock but Midland-Odessa last week.

MR. SMITHSON: And those were partially purchased with transportation
development credits. We appreciate that.

MR. WILLIAMSON: Yes, forced out of me.

MS. ANDRADE: And I have to acknowledge that he called me while he
was on the bus and he sounded very proud. Thank you, Commissioner
Houghton.

MR. SMITHSON: I heard his phone call; I was driving.

MS. ANDRADE: I saved it.

(General laughter.)

MR. SMITHSON: Thank you very much.

MS. ANDRADE: Thank you.

MR. WILLIAMSON: Thank you, sir. John? Good to have you back, John.

MR. WILSON: Thank you very much. Mr. Chairman, members of the
commission, good afternoon. My name is John Wilson, I am the general
manager of Citibus in Lubbock. I also currently serve as the vice
chairman of the Public Transportation Advisory Committee and
president of the Texas Transit Association.

I would like to express my support for the proposed revisions to the
public transportation funding formula being considered by the
commission. In my capacity as vice chair of the Public
Transportation Advisory Committee, I know that a significant amount
of time and effort was invested by the committee, by the staff, and
by others involved in the process of developing the proposed
formula. I believe the department utilized a thoughtful process to
develop a meaningful formula that advances statewide goals.

I would like to express my gratitude to department staff and to all
members of the PTAC for the work that went into producing this
version for the formula for the commission's consideration.

In my capacity as general manager of Lubbock Citibus, I would like
to point out that Lubbock will continue to experience decreases in
state funding flowing from the formula, however, I know that the
proposed formula represents the best effort to date to consider a
variety of needs and interests while pursuing legitimate goals,
therefore, we are supportive of the proposed formula revisions.

Finally, I'd like to take this opportunity to provide some comment
in my capacity as president of the Texas Transit Association. There
are many systems like Lubbock who have sustained decreases from
previous formulas and will continue to experience decreases in this
revision. Losing funding at a time when costs are accelerating is
always difficult and creates a greater burden upon local funding.
The Texas Transit Association understands these concerns and the
general importance of local funding as part of local transit
budgets. Therefore, the association will be undertaking the efforts
to educate and inform members of ways to enhance local funding and
to maximize the benefit of local funds that are available.

While serving in a leadership position with TTA, I have worked to
bring together the diverse interests and positions of many members
and stakeholders with that of the department. Thank you for the
opportunity to address the commission and thank you for all the
stuff you do for the state.

MR. JOHNSON: I think, John, it's very rare when someone comes before
any disbursing agency and says look, I'm getting less money but we
understand what the big problem is, and I congratulate you for the
realism and making that point well known but also understood.

MR. WILSON: Thank you.

MR. WILLIAMSON: Well, I think what sometimes gets lost in the
conversation is we are striving -- that's the second time I've used
that new word today -- we are striving to lay the groundwork to go
to the legislature together and ask for a healthy increase in
general revenue, and one of the ways that we can defend that
position -- well, the first way we can defend it was to be assured
that a good transportation person like Robert Nichols got elected to
the state senate, the next thing we could do is bring formulas
across the street that says okay, after all these years we've
resolved, we've got a base system, we've got a reward system, we're
focused on performance, this is as good as it gets, now we need an
investment in the process.

So I think you're going to find that we'll be glad that we did this,
however painful it is, but like John, I appreciate the fact that
your words mean something.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

And Hope, I'd really like the El Paso persons start again, I know
there's a couple of other things that you're kind of interested in.

MS. ANDRADE: Mr. Chairman, thank you for accommodating us, and our
staff and representatives are going to go to the meeting, and I've
already sent them a message that I will be delayed so that I could
participate in the El Paso vote.

MR. WILLIAMSON: Well, I know they're back in the back, or some of
them, not all. We're going to take exactly three minutes to kind of
stretch, and then we're going to start with Chuck. Chuck Berry, are
you here? I'm assuming Chuck Berry is someplace. I'm going to start
by asking Chuck and Amadeo and Phil some questions, if you don't
mind.

(Whereupon, a brief recess was taken.)

MR. WILLIAMSON: We'll come back to order from a brief recess, and
Mike, let's return to the item on the agenda concerning El Paso.
With your indulgence, I'd like to visit with Chuck Berry, our
district engineer.

Chuck, I have a few questions. This is one of those rare times where
I don't have a sense of where the commission is, and so we're going
to have to kind of flesh things out from the darkness of ignorance
perhaps to the sunshine of revelation.

Much has been made by some of the testimony about whether or not the
establishment of a city RMA is supported by the public, and I made
notes on the testimony, there was a considerable amount of reference
to the MPO vote. What percentage of people who live in El Paso
County, as far as you know, live inside the city limits of El Paso?

MR. BERRY: We've been reporting 85 percent.

MR. WILLIAMSON: Do you know off the top of your head the percentage
of people who live in El Paso County who were represented by mayors
or other locally elected officials that voted to not support the
resolution?

MR. BERRY: No.

MR. WILLIAMSON: Would that be something you could calculate?

MR. BERRY: Right here, right now, probably not. Most of those areas,
if not all of them, were represented at that meeting, including the
area that's represented in southern Dona Ana County, Dona Ana being
New Mexico. So there was a good representation at that MPO meeting
for people that were outside the city limits of El Paso.

MR. WILLIAMSON: And do you have any idea what percentage of people
live outside the city of El Paso that don't live inside of one of
those cities? In other words, if 85 percent live inside of El Paso,
do the other 15 percent live inside other cities or does 10 percent
live in the country and 5 percent live in incorporated cities?

MR. BERRY: It's probably close to split; that would be my estimate:
split between the people that are inside the incorporated areas and
those that are not. Because there are several communities that are
out there that are not incorporated areas and yet they're pretty
good sized groupings of people.

I'm now remembering that our Montana Vista area in the northeast
part of the county along 62/180 is a huge population center that's
growing out there that is not represented by a city, they would be
inside the El Paso County.

MR. WILLIAMSON: The project that is referenced in the RMA
application has been represented to us to have been approved by the
members of the MPO. Is that correct?

MR. BERRY: That is correct.

MR. WILLIAMSON: Was that project approved as part of their normal
plan?

MR. BERRY: The approval was for the purpose of including it in the
metropolitan transportation plan. The project had been included in
parts but we needed to have it included with the mobility proposals,
the express toll lane part of the project that was to be a major
part of the funding, so we needed to have that incorporated into the
planning.

MR. WILLIAMSON: And when that was done, was there any context of the
RMA? What was the discussion at that point about who would sponsor
the toll lanes, who would come up with any equity if necessary? Was
it going to be a TxDOT project?

MR. BERRY: There was very little discussion on the finances of the
project. Typically it was just the numbers for the cost, where the
money was coming from, but not who would be sponsoring the project.
When the RMA issues would come at that point, we were deferring them
to a later date because although they complement each other, we
don't have to have it as a part of the program, it could run in a
couple of different options.

MR. WILLIAMSON: The beginning and the end of the project, are they
both located inside the city limits of El Paso?

MR. BERRY: That is correct, yes, sir.

MR. WILLIAMSON: Members, I'm no doubt going to have some more
questions for Chuck, but if you have some questions you want to ask
of him, please do so. You don't have to.

MR. HOUGHTON: I do. Chuck, it's been represented that money was
spent on a public awareness campaign. Can you talk about that a
little bit from your perspective?

MR. BERRY: Yes, sir. Typically the El Paso District tries to go out
and accomplish as much public involvement as possible. This was a
huge issue in trying to inform the public about what our proposal
was for the I-10 southern relief route. We had evaluated over 150
options in the region for what might be the best way to resolve our
mobility concerns, and had developed a recommendation for improving
Loop 375 through the southern part of the county up against the
international border with Mexico as a parallel route for Interstate
10 that would provide an option to that.

We have never considered a project of that magnitude in our history.
From end to end, when you do go outside the city limits, if you were
to consider the project from the New Mexico state line to beyond the
city limit in El Paso County, we are talking about on the order of
an $800 million program, and that's simply for construction.
Something of that magnitude had to really get out and get to the
people.

We had over three dozen public meetings with neighborhood
associations; we put advertisements in the newspapers trying to tell
people of when our four open house meetings were going to be held;
we took the step to place this information also on the radio and
purchased TV spots for presenting this information on what was the
proposal, what was it like, and then these TV spots would close with
the information on the next public meeting. The TV and radio spots
were right at $100,000 for that part of the campaign.

MR. WILLIAMSON: One of the persons testifying indicated that the
tenor of the ad was to sell an idea as opposed to inform the public.
Was that because the ad appeared to be positive in that way? I mean,
clearly the person who testified to that believes that.

MR. BERRY: It was intended on what is the recommendation and what is
it not. This is the recommendation to create a parallel route to
Interstate 10 along the southern relief route and that the
information campaign would say what it was and what it wasn't,
because it was a lot of misinformation about what was being proposed
by TxDOT out in the public and we felt a very strong need to inform
as many people about it as possible.

I got a number of comments that it was helpful, I got some comments
also that were questioning hey, we've never done that before. My
typical response was we've never proposed an $800 million program of
construction before either.

MR. WILLIAMSON: Okay, can you stop for just a second?

You're going to hate me for this, Mr. Chase, but I want to talk to
you. I never give him any warning. I neither wish to protect nor
wish to not protect good employees when they do things
entrepreneurially, by my recollection is in our focus groups on the
Trans-Texas Corridor and on toll roads generally -- which your
division was intimate in setting up and conducting -- our public
hearings, not focus groups, we were told repeatedly: TxDOT, you do a
bad job of advertising what toll roads are and what they are not. Is
that correct?

MR. CHASE: For the record, my name is Coby Chase. The answer to that
is yes.

MR. WILLIAMSON: And as a result of that, through at least two --
that I'm aware of -- district engineer meetings we tried to
emphasize to division directors and district engineers that we had
to become more expressive in explaining what the toll program was
and what it wasn't.

MR. CHASE: Yes, sir.

MR. WILLIAMSON: Thank you.

Chuck, is it the case that you had been incented from the commission
and from administrative staff to not be afraid and to be
entrepreneurial and to approach it that way?

MR. BERRY: Yes, sir, that's part of the program.

MR. WILLIAMSON: And was the advertising, as far as you know,
reviewed here in Austin?

MR. BERRY: Yes, it was.

MR. WILLIAMSON: After complaints were received?

MR. BERRY: During and before, yes, sir.

MR. WILLIAMSON: I think the decision was it was dang sure
entrepreneurial and a little bit different from what TxDOT had done
but we felt like it was objective.

MR. BERRY: Yes.

MR. WILLIAMSON: I'm through with you for a moment.

MR. HOUGHTON: Can I ask one more question?

MR. WILLIAMSON: Oh, please, yes.

MR. HOUGHTON: The only question I have other is the Northeast
Parkway was alluded to as being pulled off the plan.

MR. JOHNSON: I heard two projects.

MR. HOUGHTON: Why would the Northeast Parkway not be feasible at
this point in time?

MR. BERRY: It hadn't been pulled off the plan. The Northeast
Parkway, along with other portions of the mobility study that has
been performed in El Paso County continue to be included in the
plan. What we had recommended to our El Paso MPO was that we
re-prioritize projects to build the most urgent, most needed
projects first. Our analysis showed that the most benefit to
relieving congestion along Interstate 10 would be gained by
constructing two portions along Loop 375, what's now called the I-10
southern relief route, and that the other projects would stay on the
plan but their construction would be deferred to a later date. We
wanted to build the most important stuff first.

MR. HOUGHTON: What's the obstacle on the Northeast Parkway?

MR. BERRY: It's a 20-mile route from where it leaves out State
Highway Loop 375 to where it reconnects with Interstate 10 in
southern New Mexico, Dona Ana County, at New Mexico State Highway
404 interchange with I-10, about 20 miles. Nearly exactly ten miles
of the proposed route is in Texas, nearly exactly ten miles of the
proposed route is in New Mexico. We've coordinated with New Mexico,
and New Mexico has some existing two-lane highways that comprise the
proposed route, Texas has nothing. It would be new location in
Texas, it would be proposed expansion in New Mexico if the expansion
were deemed to be necessary.

We planned a ten-mile construction project for Texas because New
Mexico was not able or not willing to include that ten-mile section
of the project in their statewide development plan. I believe that
Mayor Cook was involved in discussions with New Mexico, I was
involved with discussions with my New Mexico counterparts to try and
get them to prioritize that work, but we were unsuccessful. It's not
a priority in New Mexico. I think some of the words that were
reported in El Paso were that it's not a priority in New Mexico to
take care of an El Paso problem.

We developed a project that was ten miles long and essentially a
super two. I think you are familiar with the super two design
because the four-lane divided wouldn't make sense unless we had a
four-lane divided for the other ten-mile route in New Mexico. The
super two design was developed, we performed traffic analysis on it,
and lost like 50 or 60 percent of the traffic that otherwise would
have taken the route if we had a four-lane divided all the way
through from Texas into New Mexico. It did not turn out to be very
productive with toll revenue and toll-bonding capability was very,
very low.

MR. HOUGHTON: So you just made a statement that New Mexico indicated
it was a Texas problem and they were not interested in helping Texas
with its problem.

MR. BERRY: Those are the reports that I heard of others that heard
those replies; I did not ever hear that directly.

MR. HOUGHTON: But they vote at the MPO level to block certain Texas
initiatives.

MR. BERRY: Our metropolitan planning area is established by the
Federal Highway Administration and includes southern Dona Ana
County. Southern Dona Ana County has four representatives on our El
Paso MPO Transportation Policy Board that consists of about 25
members or so -- it's 24 or 25 members, I believe. Three of them
voted on the RMA resolution.

MR. HOUGHTON: Voted which way?

MR. BERRY: They voted in favor of not -- I'm trying to get that
straight -- they voted against the RMA resolution. The motion was
actually not to support to the resolution, so they voted in favor
not to support.

MR. HOUGHTON: My next question is who is chair of the MPO now.

MR. BERRY: State Representative Joe Pickett is the chair of the El
Paso MPO.

MR. HOUGHTON: Who will be the chair when he rolls off?

MR. BERRY: The elections are held in July of each year. I don't
recall if it's part of our by-laws or if it's traditional. The
chairperson is elected at that July meeting and that's yet to be
held.

MR. HOUGHTON: Who is vice chair?

MR. BERRY: The vice chair is Mayor Ruben Segura from the city of
Sunland Park, New Mexico.

MR. HOUGHTON: What's the population of Sunland Park, New Mexico?

MR. BERRY: I'd have to estimate, I don't recall it off the top of my
head. It must be 10,000 or so, if it's that big. The delegation from
El Paso is telling me it's about 5,600 population in Sunland Park,
New Mexico.

MR. JOHNSON: Chuck, the changing in the prioritization of certain
projects on the program, the timing of it, did it have anything to
do with the consideration by the City of El Paso to form an RMA?

MR. BERRY: No, sir, none whatsoever. The re-prioritization of
projects is what we continuously do to try and make sure we're
addressing the most important projects first. The Northeast Parkway
had been considered for a long time to be a very viable and
beneficial project to proceed with, but when we couldn't build the
other ten miles of it, it became much less beneficial to helping
reduce congestion along Interstate 10. We're talking about on the
order of 230,000 vehicles a day at the maximum point of traffic
volumes on I-10 in El Paso, 230,000 vehicles every day.

MR. WILLIAMSON: I'm sorry, John. I need to follow up, though, what
you just said. I was of the impression, listening to the testimony
-- and maybe I assumed and I shouldn't have -- that the MPO action
of moving the northeast road down the priority list was specifically
to free money up for the RMA and their project.

MR. BERRY: That's partially correct. It was to free up the money for
that project regardless of who developed the project, whether there
would be an RMA or not.

MR. WILLIAMSON: So one could not use that as an argument against the
RMA. What I heard a while ago was -- and again, I could have
mis-heard -- was well, they want to form this RMA and look what
they've done, they've already taken money away from another project
in order to get it done.

MR. BERRY: Sir, the El Paso MPO voted for that re-prioritization at
TxDOT's recommendation. What we feel very strongly is our
responsibility out there is to come up with the technical
recommendations for our policy-makers to approve of. We made that
recommendation and the Transportation Policy Board approved it back
in May of this year.

MR. WILLIAMSON: Now, we're not going to lose Chuck. You don't need
to ask him all your questions unless you're on point. Anything else
with Chuck?

MR. JOHNSON: Well, while we're on this issue, the 375 which is the
initial project, is it 100 percent toll-viable?

MR. BERRY: No, sir, not at all. It's a $466 million construction
cost estimate and the preliminary toll-bonding capability was right
at $190 million.

MR. JOHNSON: So there's a gap, if I can use that word, of $270
million or thereabouts.

MR. BERRY: The two projects that you asked about earlier were
projects that we used to help close that gap. One was $81 million --
might have been $80- -- from the Northeast Parkway, and the other
one was approximately $90 million from an expansion project that had
been proposed on Interstate 10, much of which coincides with the
work that's being proposed on the southern relief route. I don't
have the percentages of how much we would actually be building on
Interstate 10 as a part of the southern relief route, but I'd have
to say it would be at least 50 percent of the work that had been
proposed under the I-10 widening project will be accomplished anyway
as part of this I-10 southern relief route.

MR. HOUGHTON: So Chuck, my math says you're still about $100 million
short. How are you filling in that gap? Is that Mobility Fund money?

MR. BERRY: We got to the point where we were approximately $50
million short of the construction funding amount for the I-10
southern relief route, so there's another project in there
somewhere.

MR. HOUGHTON: Is it Mobility Fund money that's programmed in there
too?

MR. BERRY: That's the $80 million from the Northeast Parkway, and I
believe now it's $88 million, if I'm not mistaken, so that helped
close that gap.

MR. HOUGHTON: Okay.

MR. BERRY: We're within about $50- or $52 million of being able to
account for all the funding for construction that's necessary.

MR. HOUGHTON: What's the largest project you've ever let in El Paso?

MR. BERRY: The largest single construction project?

MR. HOUGHTON: Yes.

MR. BERRY: I believe we bid a $48 million construction project for
rehabilitation along Interstate 10 outside El Paso County because it
was like 20 miles long, concrete construction. That's the largest
project to my knowledge.

MR. HOUGHTON: So this is ten times the size and within the city
limits.

MR. BERRY: If my memory is correct for that being the largest
project we've ever done, yes, sir.

MR. WILLIAMSON: Man, this guy is protecting himself.

MR. BERRY: I didn't want my staff to say, Chuck, you forgot that $65
million job.

MR. WILLIAMSON: Okay, take a seat for a second.

Amadeo? Permit me to display my lack of information as a member of
the Transportation Commission. The boards of MPOs, how does the El
Paso area decide the makeup of its board?

MR. SAENZ: The makeup of the board of the MPO is, in essence,
determined by the board themselves through by-laws.

MR. WILLIAMSON: Well, how does it first get determined? In the
beginning, God created heaven and earth. In the beginning, how did
it get created?

MR. SAENZ: That was before my time.

(General laughter.)

MR. WILLIAMSON: Well, you've got the most gray hair, I thought you'd
be the one to be able to answer the question.

MR. SAENZ: We'll have to compare.

MR. WILLIAMSON: Well, you damn sure got more hair than we do.

MR. SAENZ: My guess would be that at the time when MPOs were formed
-- of course, they're made up of elected officials -- it was
supposed to be made up of mostly elected officials of the region of
this urbanized area and you have the members of the city, you have
the members of the county, they then become kind of members of the
MPO. Then they decide through by-laws to identify their board
membership. At least, that's kind of what we did in the Valley.

MR. WILLIAMSON: The reason I ask is I notice in El Paso and in
Austin there are a lot of elected officials on the MPO board
compared to my part of the world where there's very few. I'm just
kind of curious how that works.

MR. SAENZ: Well, if you look at the federal guideline, it says that
the membership of the MPO needs to be made up of a majority of
elected officials, and they're elected officials that are within the
metropolitan boundary. So based on that, they would have identified
a metropolitan boundary, then elected officials would then become
members.

Bob may probably know a little bit more.

MR. WILLIAMSON: Does our crack legal staff know the answer to my
question: In the beginning, who created the MPOs?

MR. JACKSON: Federal law gives it to the governor and the local
officials to decide membership of a board. The state transportation
agency, by federal law, is on the board, and otherwise it's locally
elected officials and transit agencies. And I'm Bob Jackson, deputy
general counsel.

MR. SAENZ: Bob, hasn't there also been some state statutes, state
laws that have put in place statewide elected officials on MPOs? I
seem to remember something.

MR. JACKSON: No.

MR. WILLIAMSON: Okay, thank you, Bob.

Phil? Why would anyone want to form an RMA?

MR. RUSSELL: What was the question, Chairman?

MR. WILLIAMSON: Why would anyone want to form an RMA?

MR. RUSSELL: That's kind of an open-ended question, Chairman.

MR. RUSSELL: You know, ultimately I think it's all the things we
heard about this morning: people like to have control over their
local affairs, they like to be the master of their own destiny.

MR. WILLIAMSON: Well, if the City of El Paso didn't form their RMA
and if this wasn't approved as a project, could the Department of
Transportation pursue those toll lanes as a project?

MR. RUSSELL: Sure.

MR. WILLIAMSON: Would the MPO have to agree to let us do that?

MR. RUSSELL: The MPO ultimately will have to approve any of these
projects regardless of whomever does it.

MR. WILLIAMSON: Would the MPO have to do that even if we came to El
Paso next month and said, Tell you what, we're going to solve the
problem, we're just going to build it for you, you're not going to
spend any of your allocation on it, we'll put up all the money? They
would still have to approve it?

MR. RUSSELL: One way or another, whether federal money or projects
of regional significance will have to be approved by the MPO.

MR. WILLIAMSON: So no one can go build this road if a majority of
the MPO doesn't want it.

MR. RUSSELL: Correct.

MR. WILLIAMSON: Who all do you want to talk to?

MS. ANDRADE: I have something to say to Phil on the question that
you asked, Mr. Chairman. You know, again I say that I come from a
community that has an RMA and I've been there, I've been there when
I've witnessed what can happen when you establish an RMA, and that
is that we at TxDOT become the support and the RMA becomes the one
that tells the community what the plans should be, and of course the
final deciding factor will be the MPO.

But it's great to have a group of people that this is what they're
thinking, this what they're looking at, this is what they're
studying in transportation, and I have to tell you that it works.
And God knows that my community also went through a period of
whether they should keep the RMA after they had established it or
not, but it was all because of misunderstanding and
mis-communication.

And Chuck, I have to tell you that on your marketing or trying to
educate the community on the RMA, I know you were doing it because
you see what can be done, and so I have to tell you that I know this
is difficult, but boy, am I big supporter of RMAs because I've seen
it, I've been there, and I know what can happen, and it's great to
have local people making decisions about their local communities
instead of the state.

I just had to add that, Mr. Chairman, because I've lived it.

MR. WILLIAMSON: Thank you, Phil.

Hey, Chuck, what percentage of people who use Interstate 10 from the
east side of El Paso, or south side, depending on how you look at
it, to the west side or north side, depending on how you look at it,
what percentage live in El Paso County but don't live in the city of
El Paso, would you guess that use Interstate 10?

MR. BERRY: That use Interstate 10?

MR. WILLIAMSON: Well, maybe we need to back down from it a different
way. What percentage of people use Interstate 10 that don't live in
El Paso County, they're just El Paso-ing through?

MR. BERRY: Through traffic? The east county limit in our region
carries about 30,000 vehicles a day, the western limit of our region
carries about the same, 20- to 30,000 vehicles a day. If all of
those people were driving through, it would be about 30,000 vehicles
that are driving through the region out of that 230,000 average
annual daily traffic that we have at the maximum volume point on
Interstate 10. I can't do the arithmetic in my head, we're talking
about 15 percent or so.

MR. BERRY: Regional traffic that's moving around the area, from one
side of town to the other, north, south, east and west.

MR. WILLIAMSON: Okay. Is there anyone else, staff? I don't want to
re-institute testimony, I want to talk to staff.

(No response.)

MR. WILLIAMSON: Okay. Do we want to state positions, do you want to
hear me first, what do you want to do?

MR. JOHNSON: You're the chair.

MR. WILLIAMSON: Let me tell you what I think we ought to do. First
of all, I want to state again that I am very uncomfortable that this
is before this commission, and I think perhaps some anticipated that
we would be uncomfortable with this.

I wouldn't say I know more about the law than Mr. Pickett or Mr.
Shapleigh, they're sitting members of the legislature. I will say
that I have been intimately familiar with this approach to changing
transportation for several years and that the role of the MPO is
more focused on the projects and not on the creation of a quasi- or
governmental body authorized by the legislature.

I think, based on my own knowledge and based on the testimony, that
what I heard was that the City of El Paso, as evidenced by its
representatives, wishes to create an RMA, and that under the law
they're permitted to do that, and that the law was specifically
written to permit they and others that opportunity.

I believe the law says that in order to petition us they have to do
certain things and identify a project, but we've established now
through dialogue that no project can be started in El Paso County
without the approval of the MPO. The law also provides that if we
approve the RMA, there are certain things they have to go back and
do and then they have to bring their project back to us for
approval. So if there's no approved project, an RMA is a structure
but it has no impact on people's lives -- in other words, it can't
be activated without the project.

I think the resolution of this belongs at home, not here. I think
that if we defer this, it will be back here and it will always be
back here, it will never stop. I think the only way to stop it is to
approve the RMA and to look the mayor in the eye and say, We will
not put your project on our agenda ever until the MPO approves your
RMA. I think that places it back home where it belongs.

I think it doesn't completely give Mr. Shapleigh what he wishes, I
think it doesn't completely give Mr. Pickett what he wishes, I think
it doesn't completely give the mayor and the city what they want, I
think it doesn't completely give the county judge-elect and the
other mayors what they want, but I know for certain they'll never be
back with their application again because we will have approved it
and they won't be able to do what they need to do because we won't
take their project up until the MPO approves, and that is a rational
way for us to set this back in the community where it belongs.

And Ted, if you're uncomfortable with this, I don't blame you. I'm
not comfortable that this is before us.

MR. HOUGHTON: Well, I'm not uncomfortable, I'm disappointed
extremely in this community that I come from, that I was born in.

MR. WILLIAMSON: Well, I don't mean to start a fight with you, I just
think this is the way to resolve it.

MR. HOUGHTON: No, I'm not starting a fight, I'm extremely
disappointed in the community, in the leadership, or the lack
thereof, in this community.

MR. WILLIAMSON: I don't want anyone to go out there and say we're
forcing toll roads down people's throats because that is a currently
often repeated false statement. Whether or not communities choose to
toll themselves is up to those communities.

But I see this approach as we'll approve the structure, the law
permits you to apply, there's really no reason for us to say no, but
we're not going to put the project on our agenda until the MPO
approves, and you just need to go home and hold hands and get things
patched up. I just think that's the way to approach it.

What do you think, Mr. Johnson?

MR. JOHNSON: Well, my initial thought was that I'm very
uncomfortable voting on this particular agenda item today, as
presented, because I weigh a lot of the same issues that you do, and
what worries me about what you propose is that there is no assurance
that the communities out there will ever come to agreement, and as
you are aware, there are statewide issues here, and that concerns
me. But given the way you have crafted the proposal, I can vote on
it today. I think the city has the legal right to form an RMA, by
majority I assume their elected representatives have voted to do
that, and I don't think that we should stand in the way of that.

But back to my original statement, I'm a dreamer and an idealist and
I hope that harmony can come out of this because everybody is going
to benefit together and everybody is going to not benefit together.
And as Hope said by her remarks and experience thus far in the Bexar
RMA, these tools were created to help areas, regions, communities,
and they should be taken advantage of, and so I hope they are.

MR. WILLIAMSON: Hope, do you have anything you want to say?

MS. ANDRADE: No.

MR. WILLIAMSON: What's your pleasure, gentlemen, lady?

MR. JOHNSON: I would make the motion that basically you stated, we
approve the RMA, and the caveat be that the project needs to be
ultimately approved here, the initial project, and until the
community can come together with a unified voice that we put them on
notice that we're not going to approve the project that they bring
forward.

MR. WILLIAMSON: Okay. We have a motion. Is there a second?

MR. HOUGHTON: Second.

MR. WILLIAMSON: Have a motion and a second. I'm not going to call
for a vote because Mr. Pickett wishes to address us.

MR. PICKETT: You said earlier that this isn't what Senator Shapleigh
would wish for, this isn't something I wish for. This is exactly
what Senator Shapleigh or the mayor would want. By this vote you're
saying the MPO means nothing, you're saying that the city will
create this RMA, that until their project is approved by the MPO --
I mean, I know what the technicalities are that you're getting at.

MR. WILLIAMSON: No, I didn't say that, Mr. Pickett. I said until the
MPO approves the RMA. Listen.

MR. PICKETT: I listened, Chairman, and you're not listening. This is
what you are set out to do, you planned to do this, this was the
decision that you are going to make because it doesn't matter what
the public wants or the MPO wants. I know the political reality of
this, I know the threats that have been offered to the community if
this isn't approved. And it's not a local issue, you're not making
this a local issue, you're deciding here and you're telling my
community you have no say.

And the only thing that's going to be reported after this vote is we
came up here as the majority representing the people of El Paso and
the MPO, said no, and it was overridden, and yes, El Paso, you
create this regional mobility authority. There's no going back, it's
not going to ever not go away after this, and you're just going to
wear down the MPO or the individual members until they approve. It
won't matter after that.

As far as most people are concerned, all they're going to hear is
the RMA was created, so the effect is the same.

MR. WILLIAMSON: Thank you. We disagree.

MR. PICKETT: I guess I'll join Jim at the next meeting.

MR. WILLIAMSON: Thank you.

We have a motion and a second. All those in favor of the motion,
signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank each of you.

Mayor, I would have liked to have given you what you wanted, but
despite what the previous affiant said, I think you have a tough
hill to climb.

MAYOR COOK: Chairman, with all due respect, I don't think I did get
what I wanted, even though Mr. Pickett thinks I did, and now the
onus is on me to go back and try to get consensus in the community
to petition you to support the project. And as I understand it,
you're asking that we get the MPO to agree to support the RMA --

MR. WILLIAMSON: That's correct.

MAYOR COOK: -- not to support the project, that you would not
approve any project that's in our petition until such time as I come
back to you with the consensus.

MR. WILLIAMSON: I'm telling you it will not appear on our agenda, I
won't permit it.

MAYOR COOK: Thank you very much. I appreciate the courtesy you gave
me, and I won't give you the encore song.

MR. WILLIAMSON: Thank you. And we appreciate everybody from El Paso
that came here to voice their opinion one way or the other.

Proceed.

MR. BEHRENS: Now we're going to go back on our regular agenda,
agenda item number 3, and this will be -- I'm sorry -- I saw James
Bass, we overlooked you earlier -- we're going back to agenda item
number 2(b), and this is to continue our discussion items, and James
Bass will address you on issues on the Legislative Appropriations
Request.

This month is one in a continuing series of our discussions on the
preparations of the department's Legislative Appropriations Request,
and I don't have a whole lot of detail to provide you with today
other than just to remind you of some of the things we've talked
about over the past several months: looking at the department's
riders, simplifying those riders, eliminating some of those that are
duplicated elsewhere in state law.

We've looked at General Revenue funds that used to come to the
department to partially fund some of our programs that over recent
years have been moved out and been replaced with State Highway
funds. We're also looking at rather than having a hard cap on the
number of FTEs for the department, to replacing that with a
percentage of our overall budget that we can spend on salaries and
wages, and taking the same approach for capital budget projects as
well.

One thing I'll note that we've talked about in the recent past, the
MAINTAIN IT area of our budget, we're seeing the costs increase,
primarily due to fuel which is also leading to utility costs going
up. That's reflected and showing an increase in needs of funding
just to maintain the existing system, however, in 2008 and 2009, we
still see an increase in both the PLAN IT and BUILD IT area of our
budget. Again, that primarily is due to the tools the legislature
has provided to us, the Proposition 15 bonds and the Texas Mobility
Fund.

I will point out again that those are not perpetual funding sources
for transportation in the state and they will eventually run out,
however, it appears that they will still continue to be a large
benefit in 2008 and 2009.

The last thing I'll point out is earlier this month each of your
offices should have received a draft of the Legislative
Appropriations Request for TxDOT. It's a draft, not all of the
required schedules from the LBB are in there. I think the
instructions came out a day or two before we delivered the copies to
your offices, and so we're working to incorporate those new
schedules into the LAR, but we welcome any comments, questions that
you or your office may have.

The LAR is due at the end of August, so it will come before you for
final approval at the August meeting, so we have roughly two months
to go over it in detail and make modifications to, however the
commission may so direct us.

I'd be happy to answer any questions or again just make myself and
Finance staff available to you and your staff to go over any
questions you may have on the draft document.

MR. HOUGHTON: When you talk about MAINTAIN IT, the increase in the
MAINTAIN IT, we always index it to the State Highway Fund gas tax,
and now it's superseding that number. What is that increase? What do
we project the MAINTAIN IT to be?

MR. BASS: For this current biennium, 2006 and '07, roughly the
MAINTAIN IT expenditures are about $2.8 billion per year. The gas
tax is closer to $2.2- that it's bringing into the State Highway
Fund. Going into 2008 and '09, the average for the MAINTAIN IT
expenditures is about $2.9 billion, so going up roughly $100 million
a year. And again, one of the large increases is the fuel because
fuel impacts a lot of things on the maintenance, the roadway
materials and driving the heavy equipment, and also the utilities
that we have out on the system and in our offices.

MR. HOUGHTON: That's not a pretty picture as far as shaving off that
aging system.

MR. BASS: Correct. And the more that we maintain the existing
system, the higher those costs go which, of course, draws more money
away from mobility needs of the state, and again, for 2008 and '09,
it looks like those will be addressed primarily, it not entirely,
through the Mobility Fund and Proposition 14 that will eventually
one day dry up.

MR. JOHNSON: James, you mentioned the impact that the bond funding
has had on the current biennium and the '08-09. Does the repayment
of the bond out of the gasoline tax or the Prop 14 really start
hitting in the '10-11 biennium?

MR. BASS: It will start hitting probably in '08 and '09. We've
issued $600 million out of the Proposition 14 Interstate Highway
Fund bonds. That first large principal payment will show up in 2007,
and then as we issue more principal amount up to the current limit
of $3 billion, you're right, one year later we'd start to really see
that increase. And so I think it's probably more in the 2009 or so
time frame where we see it really start to kick in the debt
payments.

MR. HOUGHTON: I may have missed something on that, James. Where is
the peak in the structure over the next between now and 2011? What
is that number when it peaks out and when?

MR. BASS: There, of course, is a lag between when the project is
awarded and started and allocated to the different regions and then
how it pays out over time, and what we see in the state's budget is
how that pays out over time, and what we see the big increase laid
out right now is the peak is in 2008, and it's showing roughly in
that BUILD IT category just under $4.5 billion in 2008, and then it
drops to about $4.1- in 2009 is what we currently have in our draft
document.

MR. HOUGHTON: And that doesn't include, obviously, the RMAs, what
they're doing?

MR. BASS: Correct. Does not include private investment because
they're not state funds so it does not show up in our
appropriations.

MR. HOUGHTON: Like this one we approved today.

MR. BASS: Like the $1.3 billion earlier today.

MR. HOUGHTON: So if somebody had a crystal ball, and I want to say
dart board or got close to a target, in 2008 what would be the total
mobility? And we don't know the RMAS on how fast the ramp up or
what's going on, but does anybody have an idea, including this one?

MR. BASS: Including that one? Again, if we take it not as total work
underway but what would be expended for the work done in that one
year which is how this is laid out, I would say you could add, with
all the ones that are in process right now, including 130 that was
earlier today and all the ones in the Dallas-Fort Worth region, once
those get going you could likely easily add another $1-1/2 billion
of expenditures in 2008 from those other sources, the private
investment.

MR. HOUGHTON: Big number.

MR. WILLIAMSON: Anything else, John?

MR. JOHNSON: No.

MR. WILLIAMSON: James, any indication from our partners across the
street as to whether or not the transfers out of the Transportation
Fund might be diminishing?

MR. BASS: In the state budget term there's an item called
Exceptional Items that has historically applied to only General
Revenue funds, and the concept was in the current biennium -- in our
case 2006 and '07 -- that established a threshold and if you wanted
to ask for more General Revenue above that threshold in the upcoming
biennium, you had to put it in a special section of the LAR called
Exceptional Items.

For the first time ever, the instructions say that concept of
Exceptional Items will not only apply to General Revenue, but it
will also apply to State Highway funds for agencies other than
TxDOT. So we will be allowed to request more money out of the State
Highway Fund through just the basic reports and schedules, but any
other agency who receives State Highway Fund appropriations, if they
are seeking an increase, they will have to highlight that in a
separate section of the appropriations request.

MR. WILLIAMSON: So the LBB basically is saying be careful about
asking for any more money out of the State Highway Fund.

MR. BASS: It appears that a new approach will be taken when looking
at that.

MR. WILLIAMSON: We'll all need to thank them every chance we get.

I think that's all the questions we've got for James at this time.

MR. BASS: Thank you.

MR. BEHRENS: We'll go to item number 3, our Strategic Plan, and Coby
will come up and give you a presentation of our 2007-2011 Strategic
Plan and ask for you to consider it to be approved.

MR. CHASE: Good afternoon. For the record, my name is Coby Chase and
I'm the director of TxDOT's Government and Business Enterprises
Division.

Agenda item 3 is a minute order for the formal adoption of the
official 2007-2011 Strategic Plan, as required by the Legislative
Budget Board and the Governor's Budget Office.

A proper Strategic Plan begins with a vision of how you'd like your
world to be at a defined moment in the future. It then identifies
goals that when reached in total will result in that vision becoming
a reality, and in order to reach your goals you define strategies
and buttress them with unlimited tactics. What I am presenting to
you today doesn't really do that.

MR. WILLIAMSON: You did it that way on purpose.

MR. CHASE: I just wanted to build you up a little bit there,
Chairman.

(General laughter.)

MR. CHASE: I wanted you also to know that I do listen, I wanted to
put things in their proper places.

This version of the Strategic Plan provides data about the
department's projected performance in terms of the adopted budget
structure prescribed by the Legislative Budget Board. The Strategic
Plan required by the LBB and the Governor's Budget Office is built
around the automatic budget and evaluation system of Texas, or
ABEST. ABEST applies the agency's definitions of performance
measures against rather limited and inflexible outcomes and
strategies. The primary purpose of this document is to allow the LBB
to measure an agency's performance from year to year, using the
measures and objectives essentially identified when the system was
created in the early 1990s.

We must submit this official document to the Legislative Budget
Board by July 7. In reality, the ABEST approach does not make room
really for agency's to respond to changing needs, or more
importantly, to focus on what the public demands.

We've had back and forth with the LBB on this, we've talked at, to,
around, with, and I have started a conversation with people at the
LBB who watch us full time to sit down and explain this even
further, and they seem receptive to talking about this, what we
believe is appropriate for the Strategic Plan.

Given the rigid structure of the ABEST approach, and directing
agency strategic planning, TxDOT, for the second period in a row, is
suggesting a new approach. While the official Strategic Plan that
this minute order is asking you to vote on today contains a very
brief summary and discussion of the agency's mission, vision, goals
and strategies, the body of that document focuses on its rigid
budgetary reporting structure.

However, in order to truly reflect an agency's goals and strategies,
we at TxDOT believe that the Strategic Plan should be about
addressing the public's demands for more than just an accounting of,
for example, the miles of pavement receiving a seal coat across the
state. Strategic planning should drive the budget process, not the
other way around.

To that end, for the second cycle in a row now, TxDOT will produce,
with input from the commission and administration, a separate
corporate plan -- at least that's what we're calling it for right
now -- that expands upon and explains the agency's goals and
strategies and tactics in ways that more directly address the public
need. We will present the corporate strategic plan for your approval
at the July commission meeting.

We intend for this plan to speak more effectively to the public, our
private sector and public partners, and state and federal
legislators regarding what we really are about as an agency and how
we plan to tackle the transportation challenges facing Texas over
the next 25 years.

That plan will focus on the five goals the commission adopted in
April for the agency: reduce congestion, enhance safety, improve air
quality, expand economic opportunity, and increase the value of our
transportation assets. Those are very hard goals to attain,
sometimes we're not going to meet them, quite frankly, but we need
to know why and we need to explain it.

TxDOT's attainment of these goals will be discussed in terms of more
realistic and dynamic performance measures currently being
formulated, and I would venture to say I believe formulated by a
task force under the leadership of Amadeo Saenz. This task force has
determined the best measures and how these will be calculated. The
intent is for these measures, or indices, to be used both as
criteria for project selection as well as for reporting progress
towards the five goals.

These overarching goals which we see as the true measure of progress
for the department are supported by four strategies. They are: use
all the financial options to build transportation projects; empower
local and regional leaders to solve local and regional
transportation problems; increase competitive pressure to drive down
the cost of transportation projects; and demand consumer-driven
decisions that respond to traditional market forces.

As I mentioned earlier, the corporate plan will be presented for
your approval next month and it will be the primary document we use
to discuss our Strategic Plan with the public. We believe that this
is the model for state agency strategic planning that the public
demands. The public demands more and TxDOT is prepared to deliver.

So today I am requesting that you approve submission of the official
Strategic Plan to the LBB and the Governor's Budget Office. I
recommend approval of the minute order before you and I'll be happy
to take any questions that you might have.

MR. WILLIAMSON: Questions, members?

(No response.)

MR. WILLIAMSON: Coby, I don't have a question so much as I have a
request. I certainly hope we send this across the street with a
letter once again stating that we believe our Strategic Plan will
look differently and we're going to give them a copy of, and we
think our budget ought to match it, and we're happy to comply with
the law but we just really don't think this is a plan.

MR. CHASE: The fine folks in the GBE Research Section just actually
completed a draft of that letter yesterday, and they took a snapshot
approach of looking at other comparable state agencies and what they
do and do their strategic plans kind of match up with their
realities, and we'll marble that in with the letter and prepare it
for your signature. You should see that in a day.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

MR. WILLIAMSON: Motion carries. Thank you.

MR. BEHRENS: I think now we can go to agenda item 5(b).

MR. WILLIAMSON: Don't want to miss that.

MR. BEHRENS: This also pertains to comprehensive development
agreements; this one pertains to Collin and Denton counties. Phil?

MR. RUSSELL: Thanks, Mike. Again for the record, I'm Phillip
Russell, director of the Turnpike Division.

This minute order, as Mike pointed out, relates to State Highway 121
in Collin and Denton counties. Should you all approve this minute
order, you will essentially do two things: first off, you would
authorize the issuance of a final request for detailed proposals for
this project; you would also approve the process whereby we accept
and evaluate an independent public sector alternative, that being
developed by the North Texas Toll Authority.

Let me take just a brief moment to describe each one of those
actions. As to the detailed proposals, just to refresh your memory,
we did receive an unsolicited proposal on 121 last year from the
Skanska Group. By law, we opened it up for competition, received
four competing qualifications, short-listed three of those, so we
have a total of four proposals going forward. We anticipate going
out, if you approve this minute order for detailed proposals next
month.

Now, one of the things that we've been working very closely with
Michael Morris and the MPO is to get those folks to help us with the
criteria and evaluation elements itself. We've done that, Michael
has worked very closely with us, and they've helped to do a couple
of things. First off, in the proposal itself we'll have to put in
there what the maximum toll rate would be, what the escalation
methodology would be, all those sorts of things, timing of payments.

We discussed earlier this morning on the 130 project how we wanted a
small amount of money up front but we wanted to revenue-share out
over the length of this term. The situation is a bit reversed in the
Dallas-Forth Worth area with their Near-Neighbor/Near-Time policy.
They need an infusion of cash right now to develop their many other
needed projects. So the Regional Transportation Council has
requested that 75 percent of that money from a concessionaire be
made available from day one up front, and the remaining 25 percent
be submitted out over the life of the concession, so it's kind of
the reversal of where we are on 130.

You heard some discussion as well that the private sector would not
have a cap on the toll rate and that sort of thing. Clearly, the
Regional Transportation Council has set what they are willing to
allow on any toll road in that area -- it's about 12 cents, I think,
in the off-peak hours -- but they will set the toll rate and they
will also set the escalation, how a private sector concessionaire
would escalate that toll rate over time.

So Michael and the MPO have worked very closely with us setting all
that criteria. They also have provided the input that we needed on
how ultimately we're going to judge those proposals coming in, the
weighting factors.

Essentially, again, as a reflection of needing that money, that
financial plan up front, we will be placing 80 percent of the
weighting of the evaluation on their financial plan up front. The
remaining 10 percent will be on their schedule, how quickly they can
deliver this project, and the last 10 percent just on their overall
project development plan. So those will be all the critical criteria
that we'll have in the request for proposals that hopefully will go
out next month.

Now, the second part of that, the second prong is the process that
we'll utilize in receiving and approving, receiving and evaluating
the independent public sector comparator from the North Texas Toll
Authority. The process that we've developed essentially will be
we'll get all of our private sector proposals coming in from those
four firms. We anticipate those will be due in here November.

We'll go through the evaluation using these criteria that the RTC
has put before us, and we'll select what we deem to be the best
apparent value to the State of Texas, a single proposal. Then we
will look at the NTTA proposal and evaluate it using the same exact
criteria, and the intent is to create a level playing field between
the private sector or an independent public alternative. We'll
utilize the same criteria in evaluating the successful private
sector developer as well as the NTTA proposal.

At the same time, we're going to ask the RTC to do the same thing.
We want them to independently use the same evaluation criteria, go
through the same process. And then we'll make a recommendation to
the Transportation Commission, hopefully the first part of next
year, of who we think represents the best value to the region.

MR. WILLIAMSON: And I know neither nor can any commissioner push you
past your professional limits, but Phil, I hope it's not the first
part of next year. This area desperately needs this asset no matter
who builds it, and I just hope that within the limits of
professionalism we move as aggressively as we can. That area is
drowning in congestion.

MR. RUSSELL: I would agree.

MR. HOUGHTON: When are the proposals due?

MR. RUSSELL: November.

MR. HOUGHTON: November?

MR. RUSSELL: Yes, sir.

MR. HOUGHTON: Okay.

MR. JOHNSON: Phil, did I understand correctly that the primary
consideration is going to be the size of the concession fee?

MR. RUSSELL: Their financial plan. The weighting that the RTC has
given us will be that 80 percent of the evaluation for either the
NTTA alternative or a private sector developer, 80 percent of their
rating would be based on their financial plan.

MR. JOHNSON: The financial plan is the base of the concession fee of
which 75 percent is to be paid up front.

MR. RUSSELL: Up front, yes, sir.

MR. WILLIAMSON: And John, it's reflective of the region, and I think
the RTC went through a lot of pain to decide that what they need
more than anything else is this facility built as a toll road and as
much cash as possible to immediately put into non-toll facilities in
the area. I could be wrong -- and please correct me if I'm wrong,
Phil -- but I think the region decided on this criteria.

MR. RUSSELL: Yes, sir. I don't think they had much compunction about
it. To support their Near-Neighbor/Near-Time they need that infusion
of cash very quickly.

MR. WILLIAMSON: I think their viewpoint was if we're going to ask --
this is not unlike the El Paso situation where probably 90 percent
of the toll payers are within a four-county area that live right
along the edge of it, and in order for the public to support this
decision long term, each one of those counties and each one of those
communities have got to see an instant improvement in congestion or
safety or air quality in their area in exchange for the tolls
they're going to be paying.

MR. HOUGHTON: And a re-investment of the concession back into the
area for other projects, whether it be toll or non-toll.

MR. RUSSELL: Yes, sir. Clearly, their Near-Neighbor/Near-Time is
predicated on that, both toll and non-toll.

MR. HOUGHTON: Correct.

MR. RUSSELL: But Commissioner Johnson, I don't think there was much
equivocation on what those numbers. The RTC developed those numbers,
I think they had quite a bit of public involvement, and they set the
toll rate, the escalation methodology, and the idea that they needed
75 percent of that concession fee up front.

MR. HOUGHTON: And then the rest over time.

MR. RUSSELL: Yes, sir, 25 percent equally out over the 50-year term.
There were some other things in there. They want to limit the
concession itself to 50 years and there were a number of criteria
that they established for us that we can utilize in our procurement.

MR. WILLIAMSON: Other questions, members? We're comfortable that
we're putting NTTA on as level a playing field as we can, given the
law?

MR. RUSSELL: Yes, sir.

MR. WILLIAMSON: I mean, I don't know that they'll ever like the
position they're in, but I don't want them to be able to say that
they didn't have the opportunity to compete, but I don't want the
private sector to say that we show preference for someone else
either.

MR. RUSSELL: I think Chairman, we're very clear. We like competition
but we want to make sure we have an equitable playing field for all,
whether you're on the private sector side or on the public sector
side.

MR. WILLIAMSON: Okay. Anything else, members?

(No response.)

MR. WILLIAMSON: What's your pleasure?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. RUSSELL: Thanks, commissioners.

MR. BEHRENS: Agenda item number 7, our Aviation item for this month,
this is recommendation to improve various aviation projects around
the state. Dave?

This minute order contains a request for grant funding approval for
eleven airport improvement projects. The total estimated cost of all
requests, as shown in Exhibit A, is approximately $7.8 million,
approximately $6.4 million federal, $600,000 state, and $800,000 in
local funding.

A public hearing was held on May 18 of this year, no comments were
received. We would recommend approval of this minute order.

MR. WILLIAMSON: Members, do you have questions of Dave after he laid
out and made his recommendation?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second. That's a nice looking tie.

MR. FULTON: Thank you, sir.

MR. JOHNSON: Is there anything aeronautical there?

MR. FULTON: No. It's just flags.

MR. WILLIAMSON: We have a motion and a second and we're going to
hold off the vote because I just discovered that we have a potential
witness, and it's not Jim Dillon. Victoria Koenig? And Victoria has
caught her plane and flown back home. She was here from the city of
Nacogdoches and she was here to tell us that she would answer any
questions and she was for the agenda item.

Okay, members, what's your pleasure?

MR. JOHNSON: I think we've already moved.

MR. WILLIAMSON: Oh, I'm sorry. We have a motion and a second. All
those in favor of the motion will signify by saying aye.

The minute order before you proposes amendments to Sections 11.50
through 11.52 and also 11.55 and adds a New Section 11.56 relating
to the connection or regionally significant highway on the state
highway system, to be codified under Title 43 of the Texas
Administrative Code, Part 1.

Transportation Code Chapter 203 provides that the Texas
Transportation Commission may lay out, construct, maintain and
operate a modern state highway system. Access management is one
method of preserving the substantial investment in the ground
transportation system by preserving the roadway levels of service.

Senate Bill 637 of the 79th Legislature Regular Session 2005 amended
Transportation Code 203.032 to allow a county with a population of
3.3 million or more, or an adjacent county to a county with a
population of 3.3 million population or more, to adopt
access-permitting authority on the state highway system in the
manner similar to that delegating the process available to many
municipalities in the prior session. Counties meeting these
requirements are defined as eligible counties in the proposed rules.

Sections 11.51 and 11.52 are amended to allow the delegation of
access-permit authority to those eligible counties. Section 11.52(f)
is amended to require compliance with the department's environmental
review rules. Section 11.55 is amended to expedite the approval
process for entering into agreements to provide local access roads
in conjunction with department projects. And New Section 11.56 is
added to provide uniform means by which public and private entities
with authority to construct, maintain and operate regionally
significant facilities may obtain permission to connect those
facilities to the state highway system.

While most such entities are required to obtain commission approval
to construct these regionally significant highways, certain entities
with independent authority may construct regionally significant
highways that do not necessarily conform to the Transportation
Improvement Program. By adding regionally significant highways that
are not the TIP, especially in the non-attainment areas, that can
threaten the entire area's transportation conformity under the
Federal Clean Air Act and result in sanctions that could severely
basically hamper and put the state's federal program in jeopardy.

The current rules govern the connection to the state highway system
but do not give the department the ability to deny connections based
on these conformity concerns, design and construction issues or
non-compliance with federal requirements. These proposed new rules
will ensure that proper statewide planning is employed in the
construction of the major highway facilities that connect to the
state highway system, that the facilities are properly designed and
constructed and comply with federal laws, and that the environmental
impacts are adequately considered.

The rules will be posted in the Texas Register, comments will be
received until 5:00 p.m. on August 14. Staff recommends adoption of
this minute order and I'll be happy to answer any questions.

MR. WILLIAMSON: Members, you've heard the staff's explanation and
recommendation. Do you have questions?

(No response.)

MR. WILLIAMSON: Can I have a motion?

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

MR. DAVIO: Good afternoon. My name is Rebecca Davio, I'm the
director of the Vehicle Titles and Registration Division.

MR. WILLIAMSON: Is this your second time?

MS. DAVIO: Yes, sir.

MR. WILLIAMSON: So we can't give you a hard time this time?

MS. DAVIO: That's correct, sir. I'm glad for that. It made it a
little easier to come before you today.

MR. WILLIAMSON: Mike kicks me if I get too far out of line.

(General laughter.)

MS. DAVIO: These rules are fairly simple. As Mr. Behrens told you,
they are clean-up on the specialty license plate rules. They relate
specifically to the Special License Plate Advisory Committee and how
that group will work. These rule modifications, we believe it will
help make it easier for the entities that are interested in applying
for the creation of a specialty license plate, we clarify what they
are supposed to do, how the process will work for them. We believe
that these rule modifications will also make it easier for the staff
to be efficient in that process.

We request your approval.

MR. WILLIAMSON: Now, is this the set of rules that will require that
all bicycles in the state be registered by January 1, 2007?

MS. DAVIO: Well, yes, that is a component of this -- actually, no.

(General laughter.)

MS. DAVIO: We would request your approval.

MR. WILLIAMSON: Members, you've heard the staff's explanation and
recommendation. Do you have questions?

MR. JOHNSON: Rebecca, how many different speciality license plates
are there?

MS. DAVIO: There are currently better than I believe about 120
different specialty license plates. They're in the area of
universities, of charitable organizations, different groups,
military. There's qualifying plates and non-qualifying plates.

MR. JOHNSON: What are the leading sellers?

MS. DAVIO: The leading sellers are -- I thought you all were going
to be easy to me -- the leading sellers are the State of the Art
plates that are for the Arts Commission, I believe that the bike
plate is a big seller.

MR. JOHNSON: Which one?

MR. WILLIAMSON: The bicycle plate.

MS. DAVIO: The bicycle plate. It's known by different things, the
Lance plate; it's Lance Armstrong's image on it. There's also
university plates that are big sellers; A&M and UT are among the
top.

MR. JOHNSON: Top three.

MS. DAVIO: Yes, among the university plates.

MR. JOHNSON: Isn't there one that snuck ahead of the University of
Texas into number two? Didn't sneak, they just passed them.

MR. WILLIAMSON: No way.

MR. HOUGHTON: I think Mike Behrens could probably give us that.

MS. DAVIO: I know Steve Simmons would want me to say that it was the
University of Houston but I'm not comfortable committing to that on
public testimony.

MR. WILLIAMSON: You know, I forgot, most of our guys buy the State
of the Arts plate, that's what it is. We're claiming that as our
number.

MR. JOHNSON: Probably a lot of them buy the Read to Succeed plate.

MR. HOUGHTON: Oh, man.

MR. WILLIAMSON: It's getting tough up here today.

(General laughter.)

MR. WILLIAMSON: Any more questions or comments?

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. DAVIO: Thank you.

MR. BEHRENS: Agenda item 9(a)(3), this is in our Motor Carrier area,
Chapter 18, and this is going to be some recommendations in proposed
rules on changes to our insurance requirements for household goods
carriers. Carol?

The proposed rule package before you amends Chapter 18 concerning
motor carrier registration. The primary change is in the area of
auto liability insurance limits for household goods carriers
operating equipment of less than 26,000 pounds. These amendments are
necessary to implement the provisions of House Bill 2702 which was
passed during the 79th session, and was effective September 1, 2005.

The amendments were initially proposed at the November commission
meeting, published in the December 2 issue of the Texas Register,
and posted on TxDOT's website. The public comment period for those
amendments expired January 2. These amendments, the portion relating
to the auto liability limits, were removed from the rules package as
adopted during the April commission meeting to allow TxDOT time to
further study the issue of minimum vehicle liability insurance
levels.

At this time we have completed that study. To complete that study we
contacted other states and federal agencies to analyze insurance
information, traffic accident studies and crash data, and we also
conducted a public hearing concerning this issue.

What we found during our research is that national statistics
support our contention that vehicles weighing 26,000 pounds or less
incur at least as many incidents as do larger trucks, and that light
trucks are involved in serious accidents that result in significant
losses to injured parties. We also found that most states either
adopted the federal limits for their insurance levels or they have
no backup data to tell us why they selected the limits that they
selected.

Based on our research and based on our findings, we are again
recommending that the minimum level of liability insurance for
household goods carriers operating equipment with a gross weight of
26,000 pounds or less be set at $300,000 combined single limits. We
are further recommending that once FMCSA completes their current
study regarding insurance limits for motor carriers that TxDOT go
back and do a complete review of all TxDOT required limits for motor
carriers.

And at this time we're recommending approval, or if you have any
questions, I'd be happy to answer.

MR. JOHNSON: Carol, I guess we're going to ask our speaker on this
issue to come forward and make his comments, and then if there are
any questions. Is that okay, Ted?

MR. HOUGHTON: Sure.

MR. JOHNSON: Rod Johnson? Rod, you've become a familiar face and
we're delighted to have you here.

MR. ROD JOHNSON: Thank you. Good to be back.

My name is Rod Johnson. I own a small local moving company called
The Apartment Movers. We move people from one apartment to another
one, using small utility trailers pulled by normal pickup trucks.
These pickup trucks are owned and operated by independent
contractors. Today in Texas, as you know, there are still two
classes of movers: Class A which is the people with large semis,
typically the larger big companies; and then the Class B which are
typically the people like myself with small box trucks or pickup
trucks pulling trailers.

MR. JOHNSON: Is there a differentiation in the size of a moving
vehicle that separates Class A from Class B?

MR. JOHNSON: I mean do other states, do they differentiate, do they
say 26,000 pounds?

MR. ROD JOHNSON: No, sir, none of the other states.

MR. JOHNSON: By axles?

MR. ROD JOHNSON: No, sir. This is the only state that has these kind
of requirements or rules that we operate in. It's different here,
very different here -- not bad different, it's just different.

And my characterization of those Class A and Class B is not
typically just the size of the vehicle, it's also the size of the
companies. Typically your large van lines are the guys with the big
semis over the road, and your small mom-and-pop kind of operations
with one or two trucks are typically your Class B. Even though a lot
of your Class As have a Class B operation to get around some of
those requirements because the requirements are lower for Class Bs,
you don't have all the reporting requirements, and that's really
where a lot of the burden is.

The minute order before you today proposes publishing new rules on
insurance requirements for small movers, the Class B, such as our
company. We do not oppose insurance to protect Texans. For example,
we currently carry $1 million of insurance on all of the vehicles
operated by independent contractors. This is far in excess of the
proposed requirements.

The problem is the way the requirements in the rules are structured.
It will increase my cost of operation by up to 10 percent of my
gross. In an industry that hopefully operates on a 3 to 5 percent
profit margin, that is devastating, it simply puts you out of
business.

We have asked in the past, and still, that TxDOT study these
negative small business impacts. This study is required by Texas
law, Chapter 2006, Agency actions affecting small businesses. And I
provided each of you with a copy of that -- I hope you have it there
-- and I've underlined some of the sections of it because Chapter
2006 has very specific requirements for this study on adverse small
business impacts before the agency files proposed rules with the
secretary of state for publication in the Texas Register. There are
no exemptions, there are no exceptions except for the Tax Code.

Specifically, Chapter 2006 requires a comparison for the cost of
compliance between the largest businesses and the small businesses.
The comparison must be made on one of the following standards: (a)
cost per each employee; (b) cost for each hour of labor; (c) cost
for each $100 of sales. The MO before you does not meet any of these
requirements, none of the standards were met.

As a highly impacted small business man, I must request that the
study be conducted, that the Texas law be followed before the rules
are published. I am sure this is not intentional, I never would want
to imply that, I love working with the people at the Texas DOT, I
applaud their efforts at beginning this impact study -- and it is a
beginning and there will be an end to it, and hopefully there will
be a middle where we resolve all this.

I could stop right there and just say you shouldn't publish it
because it's not legal, in my opinion -- I'm not an attorney -- but
Chapter 2006 goes further, it requires a resolution of this, and
that's what I'm really here for, and that's why I've always tried to
come up and say I'm not against it or for it, I'm talking on it,
because I'd like to have this resolved.

Chapter 2006 also requires the agency to reduce the effect on small
businesses as feasible, and quoting from Chapter 2006, "Adoption of
rules with adverse economic effect. A state agency considering
adoption of a rule that would have an adverse economic effect on
small businesses or micro business shall reduce that effect if doing
so is legal and feasible, considering the purpose of the statute
under which the rule is to be adopted. To reduce the adverse effect
on small business, an agency may: (1) establish separate compliance
or reporting requirements for small businesses; (2) use performance
or standards in place of design standards for small businesses; (3)
or exempt small businesses from all or part of the rule."

Now I'm going to quote from the preamble which addresses that. "To
provide an alternative reporting system, establish a separate
compliance process, or exempt small and micro businesses from the
requirements would be, in effect, returning to the process in place
prior to the statutory change."

Now, I paraphrase that, I'm a simple guy, I paraphrase that as: it
ain't broke, why are we trying to fix this? You've got a set of
rules over there essentially established for small business to keep
from crushing them, and you're trying to take -- not you, but this
process is taking those rules and it's crushing the small business,
and your own department's analysis of it as the only way to stop
that is don't do it. It ain't broke, I don't know why we're trying
to fix it. And that is a separate issue.

Today I have the liability insurance, I have the cargo insurance, I
comply with the same consumer business protection requirements. So
what do the new rules do that the old ones don't do? They simply put
me out of business.

MR. JOHN JOHNSON: What does the new rule do to your business in
terms of the additional insurance that requires you to purchase?

MR. ROD JOHNSON: It's the process. I believe a lot of you are small
business men, and you have a business owner's policy.

MR. JOHN JOHNSON: You have a blanket policy for all the
subcontracted people.

MR. ROD JOHNSON: Yes, any hard non-owned vehicle, the same kind of
policy that almost any business owner has. And it's been audited by
the Texas DOT and it's been found to be in compliance, and it's a
million dollars, it's not any $40,000, $50,000 limits, it's a
million because I don't want to go away, I've worked long and hard
at this. But the catch is that that process, we have a lot of these
independent contractors, and they come and they go. This is no
secret to anybody. We have that policy in place to protect the
people of Texas and me, and it works, it works very well.

What's the difference? Well, the new process is I've got to take out
a policy on each one of these independent contractor's truck and
I've got to take his VIN number down and I've got to submit it, I've
got to get a cab card. Well, there's a reason the law is there in
the first place.

MR. JOHN JOHNSON: Well, am I to believe that your subcontractors,
some of them don't carry any insurance at all on their vehicles?

MR. ROD JOHNSON: No, sir. What we do is we require their insurance
company -- we have a form that we call Additional Insured and we
submit it to their insurance agent and we require that we be put on
their policy, but to be sure, we carry the business owner policy,
the hard and non-owned, and that's pretty effective, we've not had
any problems with that to this point.

But that's where we are today. That doesn't fit in the new rules
anymore. The new rules weren't designed for the small guy like me,
they were designed against us. And this isn't a consumer-driven
thing, this is a Southwest Movers Association, big moving vans
versus the small guy who is not well organized, not well
represented, they're not here. The small Class Bs outnumber the
Class As two to one in this state, it's not like they're not there,
it's not like they're hiding behind the curtains or something,
they're just small business men.

And pardon me for rambling on, but yes, the process is what's the
problem. You start trying to force that into the process that we
have, the way that most of the small moving companies operate, into
the other one, it just won't work, it becomes phenomenally
expensive.

MR. HOUGHTON: When you say process, are you talking about the time
element?

MR. ROD JOHNSON: Some of it's the time.

MR. HOUGHTON: The time and the cost of the process?

MR. ROD JOHNSON: Well, number one, here's an example, and maybe this
is not a good example. You've got a policy and you go down and you
rent a car, say you're a business person and you go down and rent a
truck, you rent a car, that's automatically covered under your
policy if you rented a box truck to do something or you hired
somebody to do something for you. But today if you went down there
and you decide you're going to start putting them on your policy,
your insurance company would see you totally differently, you're
starting to register vehicles, this is a completely different game
here.

And maybe it is in a way. But it isn't broke, I don't know why we're
trying to fix it like this. Just an opinion. But that process of the
cab cards, of registering the VIN numbers, all those things fit the
big moving company, they own the trucks, they have employees. That's
not the way the majority of the people operate, they don't operate
that way, they operate with independent contractors.

MR. JOHN JOHNSON: Well, given the fact -- I believe it's a fact --
that we've been statutorily directed by the legislature to address
these rules, if you were us, how would you comply with their
directive?

MR. ROD JOHNSON: I think the agency has put it forth right here very
clearly. It simply says --

MR. JOHN JOHNSON: You're talking about this agency?

MR. ROD JOHNSON: Right. In the preamble it says what is the solution
to the impact to small businesses, and that is that there's nothing
wrong with the rules the way they are. That's what they say, that's
TxDOT's own analysis of the situation because essentially they were
set up to reflect the large van lines and the small moving company,
the guy who uses independent contractors, and these people do turn
over, and this guy over here, he has a fleet of big trucks that he
owns and these people are employees, and they're not the same,
they're just not. And trying to make them the same, yes, it levels
the playing field if you like leveling it with a steamroller. That's
what happens, that's what will happen.

They were conducting hearings to explain all this to the small
movers. They called them off, no one was showing up. It isn't that
they don't care, they're dead, this is a gun in their head. They
called them off halfway through it and they sent it out to everyone
who wasn't even in compliance. You know, they're just discouraged,
they feel like they're dead. They call them off halfway through it;
TxDOT couldn't even get the people to show up to listen to it
because there's no solution there for them, they're going to go
underground.

And forgive me for rambling on, but there really isn't a good
solution. The problem is it's not driven by logic, it's not driven
by consumers, it's driven by a large group of moving companies
trying to eliminate the small mover. Now they may wind up doing
that, and I have sat on the other side of boards like this, and it
really is tough and you are a judge in a way.

And I think this can be resolved, I know it can be resolved. I've
listened to what went on here today, I know it can be resolved. But
a lot of it is the agency is bound to resolve this, that's what the
law says: Don't kill the small guy, just because he's small, don't
kill him because you can.

MR. JOHN JOHNSON: Well, I can assure you nobody up here wants to
kill the small guy, the entrepreneur, we thrive in that environment.
But you know, we've been directed by statute, I assume, to do
something.

MR. ROD JOHNSON: And I think some of it is probably a really good
idea, and I'm not against the insurance. I wouldn't carry this
insurance if I thought it was a bad idea. Does everybody else out
there carry it? No. And I don't think that you'll get to it,
personally, by the process that's going here. Half of these people,
from what I understand from the insurance agents, will go
underground. It's a small mom-and-pop operation.

MR. JOHN JOHNSON: A lot of them are probably there anyway.

MR. ROD JOHNSON: I think they're there now, I think that's why they
called off these sessions where they were trying to explain it to
everybody. That just didn't work. That didn't work for me, I don't
like competing against somebody else out there with no insurance,
you can't find them. You can't even turn them in to the Texas DOT;
they've got a cell phone that they bought for 20 bucks. My gosh, you
can't even find them to fine them.

And that's the other part of the problem with compliance. I don't
know how you solve that. I don't think that we're going towards
more, though, we're going towards less, we're driving people
underground with this. That's a bad idea. If you're going in the
wrong direction, the trend is not changing, it's time to stop and
slow down, at least think about it some, in my opinion.

MR. WILLIAMSON: Well, we've been thinking about it for a while.

MR. ROD JOHNSON: So have I. I think about it probably more than you
do, with all due respect.

The issue here that I have today is that as the MO is drafted, it
doesn't comply with Texas state law, and that's the first part of
it, and I don't think it can be published. There is a requirement
that the adverse effects be addressed, and I think that they can be,
and I'm more than willing to be part of any process and help in any
way.

MR. WILLIAMSON: And you expressed this view to our staff ahead of
time?

MR. ROD JOHNSON: This MO here went out last night; I got it this
morning at 7:23 a.m. and I read it and I'm standing here before you.
I wrote this sitting out there in the lobby. If I'd have known about
it, I'd have called you. We called every day to Mike Ellis to ask
for it. And it's not his fault he doesn't have it, they didn't print
it up until 2:15 yesterday afternoon -- that's the date on the
bottom of it. I can't give you advance notice of something that I
don't know about.

MR. WILLIAMSON: You can't?

MR. ROD JOHNSON: I will give you some advance notice.

(General laughter.)

MR. WILLIAMSON: Anything else, Ted?

MR. HOUGHTON: No.

MR. JOHN JOHNSON: I have a question of Mr. Monroe. I'd hate for you
to leave without having to answer a question. Richard, is there a
limitation on when rules actually take effect, is there a
requirement?

MR. MONROE: This is Richard Monroe, general counsel for the
department.

Rules have to be promulgated and approved within a six-month period
-- in other words, they're first published. And I would emphasize
that what we're seeking from the commission today is not approval of
the rules, it's only for approval for publication and an invitation
for public comment.

MR. JOHN JOHNSON: But my question is if we go through this and 45
days from now -- which I think is the limit -- and this comes back
two meetings from now which would be August for final adoption, can
part of this be that this takes effect on January 1, 2007 or April
1, 2007 as opposed to immediately when the rule is passed and
approved?

MR. MONROE: Frankly, I'm not familiar with that process. Generally
it's published in the Texas Register, you vote to approve, and it
would take effect a certain number of days after it is published in
the Texas Register.

MR. JOHN JOHNSON: Even if in the body of what you publish in the
Texas Register is --

MR. MONROE: You could do that, yes. It's unusual but you could do
it.

MR. JOHN JOHNSON: All right. Well, this is an unusual group.

MR. WILLIAMSON: Oh, right, he's fought a good running battle for
this, this has been great.

MR. ROD JOHNSON: It's not a battle. We're all on the same side of
this, or I thought we were.

MR. WILLIAMSON: I meant running battle against Billy and his bunch.
You're certainly not on the side of Billy and his bunch, there's no
doubt about that.

MR. ROD JOHNSON: I like to think we are, but the law just says that
you have to do this study before it gets published, and I think
you'd probably confirm that that's what the law says, it says you
must.

MR. ROD JOHNSON: I hope so. I mean, I could have spent my day some
other way, but this has been very educational for me.

MR. WILLIAMSON: We sense that a stronger Texas citizen has emerged
from all of this.

MR. ROD JOHNSON: From under a rock.

MR. WILLIAMSON: From under your truck that you work on.

MR. ROD JOHNSON: From under my truck that I work on all day long.

MR. WILLIAMSON: I better go fix these brakes, I'm fixing to have to
register this damn thing. Listen, I used to say that to myself.

(General laughter.)

MR. ROD JOHNSON: We work at them, we have those programs.

I guess my point, in trying to close -- if you want me to -- is that
the law is very specific, you must do the small business impact
study before they're published, and that's why I provided you with a
copy of it. It's not an if, it's a must.

MR. WILLIAMSON: I do have a question about that, Richard. Rod's
position is, and self-acknowledged not a legal position, a layman's
position is this section of the Government Code he referenced says
you've got to go do this impact on small business study before you
publish for comment. What's your viewpoint?

MR. MONROE: Yes, and also my viewpoint is we did such a study. I
have been informed of that by the division.

MR. WILLIAMSON: And your response would be a study not suitable to
me.

MR. ROD JOHNSON: It's not that it's not suitable to me, but there
are three standards that you've got to do this study based on: cost
for employee, cost for hour of labor, cost for each $100 of sales.
They didn't do it. There aren't any exceptions, there aren't any
other standards, it is must use one of those standards.

MR. WILLIAMSON: And how do we respond? I'm just curious.

MS. DAVIS: Can I bring Joe Barnard up here? He can talk a little bit
more about this study.

MR. WILLIAMSON: Hey, Joe, is this your first time here?

MR. BARNARD: I've been here before, sir, however, you know, have
fun. I'm Joe Barnard, I'm the manager of the Motor Carrier
Operations section, I work for Carol.

MR. WILLIAMSON: Where are you from?

MR. BARNARD: I'm from Abilene, Texas.

MR. WILLIAMSON: You are?

MR. BARNARD: Yes, sir.

MR. WILLIAMSON: When did you graduate from high school?

MR. BARNARD: 1969.

MR. WILLIAMSON: Where did you go?

MR. BARNARD: Abilene High.

MR. WILLIAMSON: I went to Cooper.

MR. BARNARD: I took some courses over there.

MR. WILLIAMSON: Class of '70, but my mom went to Abilene High, class
of '54.

MR. BARNARD: I wasn't there, sir; I wasn't even in elementary school
then.

MR. WILLIAMSON: Well, how did you end up down here?

MR. BARNARD: I was very fortunate.

MR. WILLIAMSON: You weren't the guy that sent me a fine for not
registering my truck on time last month, were you?

MR. BARNARD: No, sir, but did you not register your vehicle on time?

(General laughter.)

MR. WILLIAMSON: I think we didn't send our hub odometer reading in
on time and we got a fine. That's okay, I'm just a guy, I want to be
treated like every other Texan.

MR. JOHN JOHNSON: It was probably an insurance issue.

MR. WILLIAMSON: It might have been an insurance issue. I know what
this guy is talking about, though, because when we were making the
transition from being a little bitty company to a larger company,
there's some things that large companies get stuck into the law that
are pretty complicated for small guys. I think not for Rod; I think
Rod's bigger than he leads us on to believe, but for really, really
small guys, it's pretty tough sometimes.

Like for example, my favorite state agency still is struggling
between when is it a registered vehicle and when is it something
other than a registered vehicle going down the road that needs to
pay a permit.

Do we have a rule that says if you remove the right-hand front seat,
you don't have to register the vehicle? Because every oilfield
vehicle going down the road now, everybody is ripping out the
rider's seat so that there's only that one person operator seat, and
I'm thinking that must be a state law someplace.

MR. MONROE: I have no earthly idea.

(General laughter.)

MR. WILLIAMSON: Well, Joe, what did you want to talk to us about?

MR. BARNARD: We did do a study and we do have a study based on
revenue, and it does look to us it is going to be expensive for the
people to comply with this, and I believe laid that out in the
preamble, it is an expensive thing for these people to apply and
comply with this new law.

MR. WILLIAMSON: Will it be so expensive that we would not want to
adopt rules about it?

MR. BARNARD: Well, we may not like to. I'm not sure, I'm not an
attorney, I don't know how we would not adopt some type of rule to
comply with the law.

Now, the insurance level is where we have looked at to soften this
as much as we can. We can certainly set a higher amount of insurance
as a minimum requirement. We looked at setting it as low as we can
at $300,000, at least until we have to come back again, with the
feds reviewing the insurance levels. That's one way that we've
looked at it trying to soften it, and it is expensive.

MR. HOUGHTON: Out of 100 percent, is it the insurance level that's
driving the cost? Where Rod is talking about a process, you're
talking about an insurance level that may be driving the cost?

MR. BARNARD: There's two costs. I think one of them is his
procedural cost, and registering the vehicles with us and having to
file insurance with us at any level I think is a cost for him
because of the type of insurance that he will have to have in order
for the insurance company to file insurance with us. There's also a
cost of the insurance level itself. We can't seem to get around him
filing the insurance with us, that looks to us that's pretty much
set in statute. The level of insurance that's required, the minimum
amount of automobile liability insurance, that's something that we
do have some jurisdiction on.

MR. HOUGHTON: And we pegged it at $300,000.

MR. BARNARD: Right now, yes, sir.

MR. HOUGHTON: To try to mitigate those.

MR. BARNARD: Yes, sir.

MR. JOHN JOHNSON: Is the limits on my car, I've got two-five-two in
the back of my mind, $200,000, $500,000, $200,000. In my foggy
memory, am I recalling what my limits on my policy are?

MR. BARNARD: On your personal policy?

MR. JOHN JOHNSON: On my car.

MR. BARNARD: Yes, sir. That would be the individual limits.
Generally the $200,000 would be for a single injury, and I believe
you said $400,000?

MR. JOHN JOHNSON: Two-five-two.

MR. BARNARD: The $500,000 would be for multiple injuries, and then
the $200,000 would be for property damage. And what our rules are
set up is we combine all of those limits together, that's the type
of insurance that we have combined. You have a total combination
there of about $900,000.

MR. JOHN JOHNSON: And what you're saying is $300,000.

MR. BARNARD: $300,000 combined single, and that way that $300,000
floats between single injury, multiple injuries, or property damage.

MR. JOHN JOHNSON: Per occurrence.

MR. BARNARD: Yes, per occurrence.

MR. HOUGHTON: So we have, in fact, done the survey as far as the
impact financially.

MR. BARNARD: Yes, sir.

MR. HOUGHTON: You're wagging your head no and he's saying yes.
There's a disconnect, or you think there's a disconnect.

MR. ROD JOHNSON: It's black and white, [inaudible].

MR. BARNARD: We did, he hasn't seen it.

MR. HOUGHTON: He hasn't seen it. Well, I think, Rod, you need to see
the survey.

MR. ROD JOHNSON: It's required to be within this thing, everybody
has to see it, citizens of Texas have to see it, that's what the law
says.

MR. HOUGHTON: Well, I mean, Richard, in fact do we have to do that?
Obviously it's full disclosure.

MR. MONROE: Well, it is a public document.

MR. HOUGHTON: Right. Have we disclosed it?

MR. MONROE: Have we disclosed the document?

MR. BARNARD: The statute that Mr. Johnson is referring to doesn't
require you to put the whole study in the preamble but just certain
boilerplate language that the statute specifically requires stating
the results of the study, and that's what we did. The study itself,
of course we can release to anybody who wants it.

Also, he talked about three standards and I believe you can choose
one of those standards, you don't have to do all three. That may be
the disconnect here.

MR. ROD JOHNSON: You didn't choose any of the standards.

MR. WILLIAMSON: Okay, Joe, where did you live?

MR. BARNARD: I lived on Hickory Street.

MR. WILLIAMSON: I lived on Sells Boulevard.

MR. HOUGHTON: You're really going for a record today, aren't you.

MR. WILLIAMSON: Well, we're so close, we might as well.

Thank you, Joe.

MR. BARNARD: Yes, sir.

(General talking and laughter.)

MR. WILLIAMSON: Okay, Rod, anything else?

MR. ROD JOHNSON: I want to be sure that I was clear on that. The law
requires them to pick three standards and to publish those, and you
must show a comparison between the largest business and the smallest
business on one of these three standards, the cost for each
employee, the cost for each hour of labor, the cost for each $100 of
sales. They did none of those, and if they did, I would love for
somebody to show it to me. I'm getting old, my reading is poor, it's
simply not there, gentlemen, it's not there. And it isn't there, is
it? There isn't any place that it has cost for each employee, cost
for each hour of labor, cost for each $100 in sales, it's just not
there, Carol.

MS. DAVIS: Well, as our attorney said, we published the results.

MR. ROD JOHNSON: But it requires you to put those in the preamble.

MS. DAVIS: I follow what our general counsel says for us to do, I
wouldn't presume to make decisions over him.

MR. ROD JOHNSON: If I could, I could just read that whole paragraph
to you so I'm not taking anything out of context: "A comparison of
the cost of compliance for small businesses with the cost of
compliance for the largest business affected by the rule using at
least one of the following standards: cost for each employee, cost
for each hour of labor, cost for each $100 of sales. The agency
shall include the statement of effect as a part of the notice of the
proposed rule that the agency files with the secretary of state for
publication in the Texas Register."

MS. DAVIS: Well, if you have any questions, I can clarify some
issues, but if not, then we're fine. I would like to say that Joe
worked for the Railroad Commission, and I'm sorry, but he's worked
with some pretty tough commissioners, so I don't think anything you
could say to him would scare him.

MR. WILLIAMSON: He kept smiling, I couldn't get him rattled at all.
I thought having to admit he lived on Hickory Street might get him.
He knows what I mean.

(General laughter.)

MR. WILLIAMSON: You know, Rod is a pretty straightforward guy, and
we've held all this stuff up for him before because we've all been
small business guys and we understand his concerns. On the other
hand, Rod, we really trust our staff, we very seldom, if ever,
evidence public non-confidence in our staff, so here's what we're
going to do, I think.

I think we're going to vote to publish these rules, I think that Mr.
Behrens has assured me he's going to be sure that we've done things
according not just to the law but what the law intended us to do,
and I think we're going to give you plenty opportunity to argue your
case. We're not going to be in a rush to pass rules if we think that
we're not doing things right, either from a legal standpoint or from
a practical standpoint.

So have confidence in your government, it's going to work, but we
think we need to go to the next step and publish these rules, and it
will be fine, it really will be fine. We like seeing you every
month. We won't put you in a category with Mr. Dillon.

That's what I think we should do, members, and do I have a motion?

MR. HOUGHTON: So moved.

MR. JOHN JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All in favor of the
motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, say no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MS. DAVIS: Thank you.

MR. WILLIAMSON: Don't disengage, stay plugged in. We like you around
here, we like active citizens, and we really do. We'll do the right
thing. We're going to start tolling haul trucks.

MR. BEHRENS: Agenda item 9(b)(1) is a rule for Final Adoption. This
is concerning traffic operations and our Safe Routes to School
Program. Carlos?

The minute order before you proposes revisions to the existing rules
for the Safe Routes to School Program to implement the new federal
program created under SAFETEA-LU. The proposed revision will allow
us to create a program that is in compliance with both the new
federal law and guidance issued by the Federal Highway
Administration.

This will be a comprehensive program designed to encourage children
to walk and to bike to school, promote safety, reduce traffic,
reduce fuel consumption, improve public health, and improve air
quality near schools. The program will also include funding for
non-infrastructure projects such as public awareness and outreach
campaigns, traffic education and enforcement, and student education.
This is a 100 percent federally funded program with no local match
requirements.

We are also proposing expansion of the existing Bicycle Advisory
Committee to allow for members with experience related to public
health, traffic enforcement, child safety and other areas. This
expanded range of expertise will help us in implementing this
program.

The proposed rules were published in the April 14, 2006 edition of
the Texas Register and comments were received from the Texas Bicycle
Coalition. The TBC provided 36 comments regarding the proposed
changes; six of these comments were incorporated into the final
rules. Many of the TBC comments that we proposed for rejection deal
with organizational responsibilities or funding limitations that we
believe could reduce the department's flexibility to manage the
program. In addition, many of the comments involve actions that are
already allowable, in our belief, under the rules.

We recommend approval of this minute order.

MR. WILLIAMSON: Well, you've heard the staff's explanation and
recommendation, and we have one witness. There was a paperclip on
this thing. Was there more than one?

MR. BEHRENS: No.

MR. WILLIAMSON: We have one witness, our friend Robin, with your
indulgence. Robin?

MR. STALLINGS: Mr. Chairman and commissioners, Mr. Behrens, Mr.
Polson. My name is Robin Stallings, I'm the executive director of
the Texas Bicycle Coalition. Thank you for the opportunity to
comment on behalf of the Texas Bicycle Coalition regarding the
proposed rules for Safe Routes to School.

In order to avoid any current or future appearance of conflict of
interest, I've chosen to resign, effective now, from the TxDOT
Bicycle Advisory Committee. Thank you so much for giving me the
opportunity to have served there.

The Texas Bicycle Coalition is regarded as a national leader on Safe
Routes to School. We worked with the Texas Legislature to pass Safe
Routes to School in 2001. In the last seven years, working closely
with the Traffic Operations Division, we have trained almost 3,000
Texas elementary school teachers with our nationally recognized
bicycle safety curriculum. In turn, those teachers have trained
500,000 Texas children in bicycle and pedestrian traffic safety.

Most importantly, we are managing the largest Safe Routes to School
non-infrastructure program in the country, funded by the U.S.
Department of Education. We took this experience to Washington, D.C.
and working with the Texas Congressional Delegation, and the U.S.
House Transportation Committee leadership, we assisted in drafting
and passing Safe Routes to School nationally.

We now serve on the National Safe Routes to School Partnership
Steering Committee. In that capacity we have assisted the Federal
Highway Administration in the development of the guidance for state
departments of transportation. Nationally we serve as a resource to
DOTs and other state agencies and non-profit organizations for the
development of their Safe Routes to School programs.

With this experience and knowledge, we provided TxDOT with written
Safe Routes to School recommendations and detailed supporting
comments based on the federal guidance from FHWA which we submitted
at 5:00 p.m. yesterday. Sorry you didn't have more time with that.

Our comments can be bundled easily into two main categories.
Detailed explanations for each item are in those written comments.
Number one, maximize impact of funds; number two, accountability.

In maximizing the impact of funds: number one, we would say we
recommend that you commit 70 percent of Safe Routes to School funds
to infrastructure and 30 percent to non-infrastructure; number two,
please -- just understand please in front of every one of these --
separate the programs and calls for applications; three, solicit
applications on a competitive basis for one statewide five-year,
non-infrastructure reimbursement grant; four, use the working
capital advance program management tool as directed by the federal
guidance; five, provide incentives to contractors or political
subdivisions for timely completion of infrastructure projects.

Accountability, you have five items there: include meaningful input
in the program, from design to evaluation, by increasing, not
diminishing the role of your Bicycle Advisory Committee; two,
require annual reports to the commission and the legislature, not
just Federal Highway Administration, as required by the guidance;
number three, allow for outside evaluation of Safe Routes to School
programs by an impartial entity such as a university or
transportation institute; four, do not remove the entire state-owned
road network from consideration in Safe Routes to School project
applications; five, remove for-profit organizations for eligibility
-- that appears to be in conflict directly with the federal
guidance.

In conclusion, we're asking you to table these rules for one month
to reconsider the rule language. We or other national experts are
available to work with the staff to get Safe Routes to School right
from the beginning for the safety and health of Texas children. I
eagerly await your questions.

MR. WILLIAMSON: Is this the first Carlos has seen of this?

MR. STALLINGS: Actually, that's a reiteration of the things that we
had given Carlos in the first comments, and the response to the
comments, he didn't get before you all did yesterday, and then I
gave him that about four hours ago when we first got here.

MR. WILLIAMSON: And Carlos, you must certainly agree with most of
these.

MR. STALLINGS: A couple of little additions I made as I realized
what I'd left out while we were waiting. It would have been shorter
if we hadn't had so much time.

MR. WILLIAMSON: And so you probably agree with Robin that we need to
postpone these rules?

MR. LOPEZ: Not exactly.

MR. WILLIAMSON: You know, Robin, first of all, I regret that you
resigned.

MR. STALLINGS: Well, there's been some concern I've heard from a
number of TxDOT staff that it looked like by the -- we care a lot
about these rules and the Safe Routes to School Program, and that's
actually why I resigned -- not that I couldn't be talked back onto
it because I really appreciate that and being able to serve there --
but it looked like that we might be trying to set up something in
the Bike Advisory Committee and to give them more authority that
would somehow help the Texas Bicycle Coalition where I am employed,
so I wanted to make sure we took that off the table right away.

In fact, I believe there is no conflict of interest with the
infrastructure program and there could be a conflict of interest
with the non-infrastructure program. In that case, I would recuse
myself from those type of discussions.

MR. WILLIAMSON: Well, let us compliment you for your sense of
ethics. We appreciate that. That's why we need guys like you on the
committee.

Speaking of guys like you on the committee, what's happened to
Tommy.

MR. STALLINGS: Tommy eagerly awaits the next meeting. In fact,
Tommy, as many of the Bike Advisory Committee members have said,
really after that first round two or three years ago, really wanted
to participate in the design of the new program and in advance and
to look at how we could improve the application process and that
whole scoring process, because we all recognize, Carlos's shop and
all of us recognize that there is definitely room for improvement,
that was a pilot program.

MR. WILLIAMSON: We miss Tommy. He owes you an apology. Did he ever
apologize to you?

MR. JOHNSON: No, but that's long gone and forgotten.

MR. WILLIAMSON: No, it's a matter of principle.

MR. JOHNSON: He thought he was doing the right thing.

MR. STALLINGS: Tommy is probably on line right now so we could
probably wave to him.

MR. WILLIAMSON: Hey, Tommy.

MR. JOHNSON: Hi, Tommy.

MR. WILLIAMSON: Well, Tommy is a good guy. I see him around Austin
occasionally.

MR. STALLINGS: He works really hard and really cares about these
issues of bicycling in Texas.

MR. JOHNSON: And that's great.

MR. WILLIAMSON: Questions, members, of our good friend, Robin.

MR. JOHNSON: Robin, first of all, the Texas Bicycle Coalition and
you personally, are a very class advocacy group and do marvelous
work, hopefully always working within the system and working with
this agency to make things safer for bicyclists around the state,
and I salute you for your effort. I know you're very dedicated to
what you do.

I'm curious on these five points on the maximize use of funds and
the accountability, and you just mentioned you might have thought of
a couple of others after you printed this up. Do you have specific
parts of the rules that you would modify to incorporate or to at
least get these goals into the rules?

MR. STALLINGS: In fact, we submitted it all and our comments are in
highlighted colors and stuff, so we actually have already done that.

MR. JOHNSON: And that was done between the meeting two months ago
when the rules were first presented and now?

MR. STALLINGS: Right. And then Carlos -- which I really very much
appreciate -- last week gave me the current set of responses to our
comments which gave us enough time to work on them, so some of those
we accepted with no problem. They accepted a few of ours and we have
accepted a few of theirs, but the concern is -- and I don't disagree
with Mr. Lopez, Carlos, that many of these things could be done --
he's just not old enough for me to call him Mr. Lopez, I'm sorry.

MR. WILLIAMSON: Yes, he is, he's going to retire this year.

MR. STALLINGS: I could call him Mr. Director, no problem.

(General laughter.)

MR. STALLINGS: Some of these things, especially with the Bike
Advisory Committee which is set up nationally, virtually every state
-- I could pretty much tell you what's going on anywhere in the
country right now -- they're setting up citizens task forces to get
all this input in advance in the development of the program and
setting a vision for the program and the direction, and this process
right here before you is the only time that we really have a chance
to make an influence on that because everything else is going to be
developed either written by TTI or that the next time the public and
the Bike Advisory Committee will see it will be after the call for
applications has already gone out, so it's very late in the game to
make an influence on it at that point.

So it was necessary for me to get this laundry list that is probably
a little more detailed than the rules need to be, but some of the
things we feel so strongly about, and we're not just helping other
people set up their programs but we're learning from them every day
and there is quite a body of knowledge out there now on Safe Routes
to School and what works.

And what we're concerned about is that we've got this opportunity,
it's one of the most highly effective dollars you could spend here
to do something about congestion mitigation, air quality, the health
of children, doing something about obesity. This may be the first
transportation program that ever came out of Washington that's got
sort of transportation people and health people at the same table,
and it's a great opportunity.

And of course, Carlos's division is a great place to be doing that,
they have a lot of experience with these things, but the devil is in
the details, so that's where we're concerned about what is the split
going to be between what is infrastructure, what is not
infrastructure, are the programs going to be kind of thrown
together, because it's very confusing to people, Safe Routes to
School infrastructure, Safe Routes to School non-infrastructure,
constantly everybody is getting confused. So we see that should
really be separated and have two separate calls because it will make
the programs better.

But there's quite a number of details like that that I would love if
you'd toss this back to the drawing board and we could all roll up
our sleeves, bring in a few people to the table and work it out with
Mr. Lopez, I think that we could have some of this worked out by
next meeting.

MR. JOHNSON: And the rules as proposed, infrastructure,
non-infrastructure are combined, they're not separated into two
calls?

MR. STALLINGS: Actually they're not separated into two calls. The
current plan is to have them in one call but to have them with
separate application processes. We support that.

MR. JOHNSON: Is there a percentage breakdown in the rules, though,
70-30? Obviously not.

MR. STALLINGS: No. By federal guidelines there's a minimum 10
percent and a maximum 30 percent. But we'd really like to be able to
make our case that like, for example, with 30 percent, if this is a
statewide program, whoever does it, we're going to be competing for
that but it's going to be competitive. You can touch almost every
single child in Texas and make a huge difference in their lives in
the next four or five years.

And of course, we're all about accountability, we've learned that
from Traffic Operations and also from the U.S. Department of
Education, so we believe that it will be measurable, significant
impacts that there won't be if we don't plan it out front, and that
if it gets lost behind the infrastructure, we're a little concerned
that the non-infrastructure is going to become the stepchild.
There's going to be hundreds, or even thousands of applications for
infrastructure and if they're bundled together, it's going to get
lost.

Also, if it's not a plan for what is going to be spent and what type
of applications you're really looking for, in the non-infrastructure
if you get 300 applications and people don't know if they should be
applying for $50,000 or $3 million per year, that there's no
incentive for anybody to spend the $10,000 or more it would take to
develop a good statewide program that can hold up over five years.
It's almost like asking people for construction bids and they don't
know if there's going to be 100 bicycle trails built or one
Trans-Texas Corridor. So that needs to be worked out a little bit in
advance.

MR. WILLIAMSON: That's a good idea; I like that idea.

MR. STALLINGS: I thought you'd like that one.

MR. WILLIAMSON: The only thing that would be better than that would
be to restore historical bicycle museums with that money.

MR. STALLINGS: Well, we fully support the tendency of TxDOT staff to
wanting to see that money go to transportation facilities, and so
we're all about transportation facilities, and of course, they have
done studies and they've actually already seen the impact in some
places where in, say, California they've put in $150 million already
on the ground in non-infrastructure, that anywhere they did not have
the non-infrastructure work, where it was only sidewalks,
crosswalks, flashing beacons, nobody used it. That is so important
there are now communities and neighborhoods that have those
facilities and the kids aren't out there again. We have lost that
for a generation.

In 1969, 50 percent of the children biked or walked to school. We
didn't have an obesity problem with our children then. Now only 15
percent bike or walk to school and it has been just one piece of
that problem that the kids aren't being active. And this is a family
program. From the experience around the country that you get the
parents involved in those trips to school, that you make a stronger
school community, and even the seniors in some places sit on the
porches to watch the kids go to school. That doesn't happen with a
radio ad necessarily, and it sure doesn't happen if you put it all
into sidewalks.

And if we do 10 percent, that's going to make a difference in Dallas
and Houston and maybe we get McAllen or San Antonio, but that's
leaving out most Texas kids from this program for the five years
that we know we have. We don't know if we'll ever get this money
again in the Federal Transportation Bill or have another chance, but
we have a chance now to get this thing kicked off.

And one last thing I'll say about infrastructure is that there are
many sources of funds for infrastructure. As you all have already
recognized in the Enhancement Program, a lot of times those million
dollar type grants can make a big difference and help get kids to
school. CEMAC funding, North Texas Council of Governments has done a
great job of spending that for bicycle and pedestrian facilities and
that can also help that trip to school. So there are Safety funds,
lots of opportunities for infrastructure but this is the shot for
non-infrastructure and we may miss it if we don't plan.

MR. WILLIAMSON: Okay, thank you.

MR. STALLINGS: Thank you very much.

MR. WILLIAMSON: Carlos, how do you respond?

MR. LOPEZ: First of all, I don't want Robin to resign, I think he
ought to stay with the Bike Committee. I think the best solution is
for him just to recuse himself whenever we grade Safe Routes
projects because there's going to be other opportunities, for
example in Jim's division, where they're going to need some advice
on other bike issues, and I don't know if we'd find a stronger
leader than Robin, so I think he ought to stay on. I just want to
put that on the record. And I do want to thank him for his work at
the national level because we wouldn't have had a program this big
and following a Texas model if he hadn't worked it so hard on The
Hill in D.C.

In regard to the 70-30 split, we can do that now the way the rules
are drafted. We would like the flexibility to see what kind of
projects come in and determine if that ought to be 75-25, 80-20 or
90-10, or that real good big project comes in and we go with the 30
split, depending on what the Bike Committee thinks and what our
internal TxDOT panel thinks. So our position is we ought to keep
that flexibility now in place before prejudging that amount before
we see any projects come in.

Regarding the separate calls for applications, that's a good idea.
We're definitely going to have different types of applications,
different processes for the construction projects versus the traffic
safety type projects. We have that in our office every day so we're
going to use that as a model, so we'll definitely have different
calls for projects.

If we do one statewide call, then we are maybe shutting out other
folks that have some real good ideas that we just haven't heard of
yet, and my position is we ought to hear out those ideas, see what
other kinds of things we might be able to fund before making that
decision just to go with one statewide project.

Regarding using the working capital advance, that's already in the
Code of Federal Regulations. We are going to follow all the Code of
Federal Regulations, so there may not be a need to even put that in
the rules because we're going to have to follow those particular
rules.

Regarding providing incentives, our plan at this time is to provide
lapse dates to the folks that get the funds and say if you don't
have your project brought to fruition by this time, we're going to
pull that money, save it for a future call, and that would get folks
moving. We're also encouraging the districts to not allow locally
let projects and for TxDOT to develop them, and that tends to get
projects moving a little quicker.

Regarding the accountability part, getting input from the Bicycle
Advisory Committee, that's definitely what we're going to do, and it
ties into Robin's third point about allowing an outside entity to be
involved. The TTI Safety Center is right now looking at our
application, our selection criteria, and looking at best practices
for states all around the country. Before we go out with that
application to people, we want the Bike Committee to look at that to
make sure it all makes sense, and we want other folks besides the
Bike Committee to also look at it to make sure it all makes sense.
So we want to get that input before that call goes out.

Regarding annual reports to the commission, we'll be glad to do that
if that's what the commission so desires. We'll probably use the one
we send to the FHWA; we're going to have to be doing that anyway,
we'll be glad to furnish that to anybody that wants it. Again, I
don't know that's necessary to really be put in the rules.

As far as removing the entire state-owned network from the Safe
Routes to School, we're not doing that. All we're saying on the
state-owned network is we don't want to see certain traffic-calming
devices like speed humps or chicanes on roads that tend to have
higher speed limits because a lot of schools are located adjacent to
roads with higher speed limits, so we want to engineer those and
make sure it's the right thing to do. So we're not precluding the
state highway system.

So that would be my response to the comments. I do appreciate Robin
giving these to me earlier today and giving me a chance to look at
them. We did have other discussions earlier, as he alluded to, and
we're always willing to have that open dialogue with him.

MR. WILLIAMSON: Members, do you have questions or comments for
Carlos?

MR. JOHNSON: Carlos, what if we were to defer action on this for
four weeks, is there any harm done?

MR. LOPEZ: It will delay the call. We want to try to do a call as
soon as possible after the school year to make sure that folks get
plenty of time to look at the applications, and I assume the federal
government wants us to spend this money as soon as we can, we just
want to go ahead and get going on this process.

MR. WILLIAMSON: Plus, I think, John -- and Richard, correct me if
I'm wrong -- it would be for the purpose of considering the adoption
of some of Robin's comments. If we adopt anything that's
significantly different from what we posted, we're going to have to
turn around and re-post.

MR. MONROE: Every now and then the courts help you, Commissioner,
believe it or not. A couple of years ago the Texas Supreme Court
issued a decision that said if you change the rules pursuant to
comments, then you need not republish, it's just if you think it up
at the last moment yourself.

Now, what concerns me is are all the changes the gentlemen proposed,
were they in the comments that we got during the comment period as
opposed to these that he just handed in.

MR. LOPEZ: They were during the comment period.

MR. MONROE: So yes, that could be done.

MR. WILLIAMSON: Would you be offended, Carlos, if we follow Mr.
Johnson's suggestion and wait four weeks?

MR. LOPEZ: No, not at all, I wouldn't be offended, but I'm not
exactly sure what extra we might accomplish because I think a lot of
the things that Robin has suggested, we have that flexibility now. I
don't know what other specific provisions.

MR. WILLIAMSON: So you wouldn't be prepared to recommend we do that?

MR. LOPEZ: No, I would not recommend we do that, that's correct.

MR. JOHNSON: Can I ask Robin a question? Robin, isn't it our mutual
best interest that we get about this call as quickly as possible,
and if we put these back four weeks, we're just delaying the
initiation of the process by another four weeks or longer?

MR. STALLINGS: Well, I've been working on Safe Routes to School
since 1999, so there's nobody in a bigger hurry than I am, but I
understand to get it right. If, for example, we had a bit of time
over the course of this month to incorporate some of the things that
Carlos has said, and there's little minor details like if you were
to take it now I believe it would include for-profit entities,
that's not consistent with the federal guidance, minor little
clean-up details. And of course, we could get some of our stuff out
so that the changes would be minor, but of course, we would like to
see the substantial stuff is the nature of the calls.

I'm concerned that if you put out a call and leave it wide open, you
get 300 responses back for non-infrastructure, how do you tell 299
of them no because you got one really excellent one. That's very
difficult to do, then nobody is going to get funding except this one
over here, but if you put it out there clearly or if you decide to
set aside some pilot money, okay, let's put aside a few hundred
thousand dollars over here so we're going to do some small pilots
and see what people can come up with, they also know what they're
competing for. They realize they've got a shot at getting $50- or
$100,000 rather than have it completely wide open.

A lot of this stuff could probably be worked out over the course of
the next month and we should still be able to hit our school year
goal without any problem.

MR. JOHNSON: But what you've described, couldn't that be worked out
in basically the structure of the call as opposed to the rules?

MR. STALLINGS: Well, there's a few things that might need to be
tweaked. For example, the Bike Advisory Committee, the changes are
in there now that they only report to the division director rather
than, for example, the last call, you may recall, you got two sets
of recommendations and you all were able to pick from them two
rather than have them merged before you get the list. And so for the
Bike Advisory Committee, they felt very respected and appreciated
for that but still completely agreed that you all had the big
picture and were going to pick whatever you wanted. It feels
substantially different in that we don't see the benefit of having
it go -- to basically have it bundled before you all saw it.

So those are some little details that if you pass them today,
they're in, not to mention for-profit entities, or there may be some
things that I didn't realize they were prepared to do and could have
been my misunderstanding that don't have to be incorporated into
this, and we'd try to work on it with the most constructive posture
possible.

MR. WILLIAMSON: You're our bicycle expert, John, what do you want to
do?

MR. JOHNSON: Well, I'm just an optimist and hopeful that people can
resolve their differences, like El Paso, but it may not come to
pass. It sounds to me like Carlos, in the way we're going to
function, has taken into consideration and into account a lot of
what Robin has brought before us in these recommendations, but you
know, there's another side of me that says four weeks from now we're
going to meet in El Paso, are you going to bike out there.

MR. STALLINGS: Yes, I'll try to take a shower before I walk in the
door. We are the statewide Texas Bicycle Coalition, I'd love an
excuse to go to El Paso any chance I get. They've become quite rabid
about bicycles these days out there. I've been getting a lot of
calls about local plans for bicycling.

MR. JOHNSON: I'm just stating there's a side of me that says in four
weeks we're not going to lose a whole lot and maybe we can reconcile
this. I certainly respect the work that the coalition does. But you
know, the staff does a great job and they take into consideration a
lot of things so I don't want to say the staff has been out of
place.

MR. HOUGHTON: I'll go with John's recommendation.

MR. WILLIAMSON: We're just trying to figure out what that is.

MR. JOHNSON: I think to defer for four weeks. He's a chamber guy, he
wants more hotel and motel tax if Robin comes out to El Paso.

MR. HOUGHTON: And I'm a bicyclist too so I bike every Saturday and
Sunday.

MR. WILLIAMSON: Actually, to put the icing on the cake, we could say
if 5,000 bicyclists show up in El Paso next month, that would really
help out, wouldn't it.

Hope, have you got something?

MR. STALLINGS: Let's get Carlos out on a bicycle, let's go for a
little ride in El Paso next month. I've been trying for years to get
him on a bike.

(General laughter.)

MS. ANDRADE: No, I'm fine. I support what John has said.

MR. SAENZ: Just an observation. Amadeo Saenz, for the record.
Normally what we try to do in the rules is to give us the
flexibility in the programs and if we start putting percentages into
we're going to spend 70 percent for this, 30 percent for that, we in
essence tie ourselves in the future that we will have to change
rules to be able to make any of those changes.

MR. HOUGHTON: Amadeo, let me stop you. I don't agree with that part
of the recommendation. I agree with what Carlos said, the
flexibility. I just think there are some other issues there that
need to be vetted.

MR. SAENZ: One of the ways to be able to, I think, address all of
the concerns would be that if the rules were passed as proposed as
final today, then as each of the requests for proposals or requests
for program calls, we could identify those terms and conditions that
were going to be pertinent to that program call. All it would
require is for Carlos's division to come to you all before and say
we're going to do a program call for this and these are the terms,
or this is the way the split is going to be, this is the way the
applications will be submitted, and this is the way that the
applications will be evaluated. And that might be able to resolve
and address so that everybody up front knows what the particular
program call is going to entail.

MR. JOHNSON: Well, please don't misinterpret what I'm saying. I'm
not saying that we should go back and adopt every one of these
verbatim, these recommendations, I just think there's some
discussion points. And I believe statutorily we've got a 10 percent
minimum -- is it ten/thirty?

MR. STALLINGS: Ten or thirty.

MR. JOHNSON: Or somewhere in between.

MR. HOUGHTON: Thirty-max.

MR. JOHNSON: Ten minimum, thirty max. I think we need to maintain as
much of that flexibility as possible because you've got to try to
address need versus what you have in terms of resources, and if we
arbitrarily pick a number, whether it's ten or whether it's thirty
and we find out the need is not in that proportion, I think we
haven't done justice to the entire program.

MR. HOUGHTON: And I echo those remarks. I don't think you take these
as listed and incorporate them, but I do think there may be some
tweaking that needs to be done. The 70-30 I'm not for at all, not
fixed; I think the flexibility is the key.

MR. WILLIAMSON: When did you receive these, again, Carlos? Just
initially, you got them some time ago?

MR. LOPEZ: A lot of these are reiterations of the comments we got
during the public comment period, and then Robin provided further
clarification, we had a discussion. A lot of these we just had to
agree to disagree, specifically on the 70-30 split or anything that
might take away Mr. Behrens's flexibility from organizational
situations. So there's some of those, I don't know about it; after
discussion I could come back. But I'm hearing Commissioner Houghton
say and everybody else they don't want to see anything like that in
the rules. I don't know how many more different things we could put
in the rules that we haven't already discussed, but we will be glad
to talk to Robin more and see if there's any other room there.

MR. WILLIAMSON: Well, I think what's in the back of my mind, Ted and
John, Carlos is gently trying to tell us there's not a whole lot
that staff would support changing, so what's to be gained by waiting
30 days, better to move ahead, and they pledge to work with Robin.
We're already refusing Robin's resignation so he's got to stay on
the advisory committee.

MR. HOUGHTON: No. I'll yield to the chair, I'm not going for the
record today.

MR. LOPEZ: If there was something I heard that could be germane to
the rules to change, I'd be glad to recommend that. I just think a
lot of these things we're going to be able to do with the rules as
written.

He mentioned one more on the for-profit effort, that dimension. The
guidance doesn't talk about for-profit per se but it does talk about
development of media campaigns as a possible non-infrastructure
program, and typically advertising agencies can do that.

MR. HOUGHTON: I'll yield to you, Carlos, if you sing the Aggie War
Hymn right here.

MR. LOPEZ: Let's wait a month then.

(General laughter.)

MS. ANDRADE: So Carlos, you're not disagreeing with anything that
he's recommending, it's just the way it's stated.

MR. LOPEZ: Well, I'm disagreeing in having a certain split in rules.

MS. ANDRADE: But that's because we want the flexibility.

MR. LOPEZ: Exactly.

MS. ANDRADE: And I agree we should have flexibility.

MR. WILLIAMSON: Do you want to wait?

MR. JOHNSON: I move we accept the rules as presented.

MR. WILLIAMSON: I have a motion.

MR. HOUGHTON: Second.

MR. JOHNSON: I think the relationship, Robin -- hopefully you
understand -- the advocacy group is supportive of what we're doing,
just trying to improve what we're doing, and we have a mutual
interest and goal there. We appreciate your input and good work and
we hope it continues, and I'm sorry, but as the chairman said, we're
not going to accept your resignation.

MR. HOUGHTON: That's subject to he withdraw his resignation.

MR. WILLIAMSON: Do you withdraw your resignation?

MR. STALLINGS: I'll withdraw my resignation. I'd like to reserve the
right to explain why I don't have a conflict of interest on the
infrastructure side, if we could kind of keep that part open.
Non-infrastructure, absolute conflict of interest.

MR. HOUGHTON: You can recuse.

MR. JOHNSON: Recuse yourself, state the reason why, and the record
will show that.

MR. WILLIAMSON: We have to do that all the time up here.

MR. STALLINGS: By the way, thank you so much for taking all the time
to listen to this when you're talking billions and billions of
dollars on other stuff, so thanks so much.

MR. HOUGHTON: Are you in cahoots with the chair to go for the record
today? Is that what was going on here?

MR. WILLIAMSON: No, but Robin knows, like the public transit guys
know, we're trying to create a department of transportation. We want
the world to know even though sometimes we disagree that bicycle
routes are important. If you can get somebody out of a car and on a
bicycle, you can relieve congestion.

MR. HOUGHTON: I may have a conflict, I ride a bicycle.

MR. WILLIAMSON: I do too but I don't have to tell anybody.

MR. STALLINGS: Sometimes we say as I'm driving my big truck, I'm not
worried about the people who are behind me but I want 10 percent of
those people in front of me to get out of their cars and get on a
bicycle so I've got more room. So we're clearing the way for you big
truck guys too.

MR. WILLIAMSON: I have a motion. Do I have a second?

MR. HOUGHTON: I think I seconded.

MR. WILLIAMSON: I have a motion and a second. All in favor of the
motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you. Thank you, Robin.

MR. LOPEZ: And thank you, commissioners.

MR. HOUGHTON: Are you going to get to sing the Aggie War Hymn,
Carlos?

MR. WILLIAMSON: How does that start: The eyes of A&M are upon you?

(General laughter.)

MR. BEHRENS: Agenda item 10, Pass-Through Tolls. This is a
pass-through toll request for US 290 in Bastrop and Lee county.
Amadeo?

MR. SAENZ: Good afternoon. How late do we have to go, Roger, so I
can kind of stretch it for the record?

MR. POLSON: About six hours longer.

MR. SAENZ: I'm not going to go that long.

MR. SAENZ: Commissioners, this item I bring to you is a minute order
that would authorize the department to issue notice for a request
for competing proposals to private entities for a pass-through toll
agreement for the design, construction, finance, and maintenance of
24 miles of US 290 from just east of Elgin which the exact location
is one mile east of FM 696 in Bastrop County all the way to Giddings
at Navarro Street, and also then a little section just the other
side of Giddings from .5 miles east 141 to 2 miles east of 141.

The request for competing proposals is as a result of an unsolicited
proposal for a pass-through toll project that was submitted by
Zachry American Infrastructure. The department evaluated the
proposal that was submitted and determined that it had merit, and
under our rules we now have to go out for competing proposals.

The minute order before you gives us the authority to go out for
competing proposals and we will evaluate those proposals to
determine the best value, and at that point the executive director
would be authorized to begin negotiations with the proposer that
provided the best value, and then of course, we would have to come
back one more time to the commission with the final terms and
conditions of the pass-through toll agreement for your approval.

The project is on 290; 290 is on the Trunk System, it's also on the
National Highway System, it is on the Hurricane Evacuation Route
System. I realized that I was probably going to be asked about the
indices and the indexes, so I did a little bit of work on that. Of
course, it's a statewide corridor; as I mentioned it's on the Trunk
System and Hurricane Evacuation Route. If you look at the project,
it's going from what I call four-lane undivided or a four-lane poor
boy because we have no shoulders to a four-lane divided highway, so
you're not adding increases in lanes, so with respect to long term,
short term or mid term project, it's more of a short to a mid term.

Your biggest benefits will come in the area of safety because you're
separating that facility and putting in a median. Our plan would be
that we would require the contractor to get enough right of way so
that in the future that median area could be used to add the managed
lanes as traffic builds up so that the managed lanes or tolled lanes
could be constructed in the future. But in the short term, we would
go from an undivided four-lane to a four-lane divided facility.

It will have improvement on air quality. It's out in the rural area
but you do get reduction in congestion so therefore you get
improvement in speed and you do get some air quality improvement,
not very much. Safety is where we get the biggest bang for the buck.
Economic opportunity, you would now have a four-lane divided
corridor through rural areas coming into the metropolitan area of
Austin, so you do have some economic opportunity. When we looked at
the asset value of the facility, because of cost it only had a 13
percent or .13, but the benefits with respect to safety and economic
opportunity as well would probably make this project a good project.

MR. WILLIAMSON: And does our district engineer understand what that
.13 means?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: So he or she can explain it to the House and the
Senate member and the county judge and everyone that we're
attempting to educate about and what it means to build these roads?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Now, I'm not normally too interested in a .13 road
but I understand the value associated with human life, and in my
view, this project is more about safety than it is anything else. I
appreciate our attempt to figure out if something adds jobs or
reduces congestion, but the reality is this is a safety asset and
that makes the .13 tax recovery acceptable, whereas, under other
circumstances it just wouldn't be. I mean, we've got projects that
Mark drives on every day that would be a .45 or .50 in the Austin
District that he probably wishes would be addressed.

MR. SAENZ: As I mentioned the safety, the safety benefit would be
the controlling factor as well as that we do have this as one of our
Hurricane Evacuation routes.

MR. JOHNSON: Amadeo, didn't a group, a coalition of counties
surrounding Travis County basically come up with their priorities,
and 290 East was number one?

MR. SAENZ: Yes, sir, this was one of their priorities. This project
was also the district had been working with the counties, both Lee
and Bastrop counties about the possibility of doing a pass-through
toll through the county through those public entities. The counties'
tax base is not that great and they could not afford it. The private
sector coming in gives us another opportunity to be able to address
those transportation issues.

MR. JOHNSON: Is Lee County in the Austin District?

MR. SAENZ: Yes, sir.

MR. WILLIAMSON: Ted wants to know which part of America is Zachry
American from. South America or North America?

MR. SAENZ: Texas America.

MR. WILLIAMSON: Oh, from Texas America. We just figured it was
another one of those Spanish firms.

MR. HOUGHTON: How many miles?

MR. SAENZ: It's between 23 and 24 miles.

MR. JOHNSON: Isn't a portion in there under construction right now
to go four-lane divided?

MR. SAENZ: Yes, sir. This project would start immediately east of
the portion that's under construction right now and continue east
all the way into Giddings.

MR. HOUGHTON: I have a question, though. If, in fact, there's
consideration -- I don't know if I'm getting outside my boundaries
here -- to toll 290 from 35 to 130 by the CTRMA or others, if there
is a concession, cannot that concession be used partially to build
out this facility as part of an agreed-to condition?

In other words, instead of using 100 percent pass-through financing
on this, one of the stipulations in negotiations could be that
up-front concession or a piece of it go to building this to
supplement the pass-through financing and reduce the amount of
pass-through we would use?

MR. SAENZ: Yes, sir, that can be done. Of course, the CTRMA is
taking the lead on the 290 project, but that could be something that
we could work out where CTRMA, as part of their concession
agreement, could provide part of the funding for this so that it
does not all require payback.

MR. HOUGHTON: Because this is rural counties and they don't have a
lot of wherewithal to throw in cash to supplement our strategic
priority.

MR. SAENZ: Yes, sir. And of course, as we looked at the project
early on, the first thing we looked at is could we make this portion
of 290 a toll project. The problem is it's out in the rural area, we
have access issues that we would have to address, so that's the
reason that we phase it in and we go from a four-lane undivided to a
four-lane divided with a wide enough median so that as traffic
builds up then you can continue those express lanes and those lanes
would be the toll lanes.

MR. HOUGHTON: I sure would like to explore that, Amadeo. I know that
there's consideration, that we're talking about the 290 toll process
and the concession potential up-front payment.

MR. WILLIAMSON: Well, you might can use the concession in urban
Austin to pay for improvement in rural Austin District, but at a
.13, that sucker is a long way away from being toll viable.

MR. HOUGHTON: Yes, but we can use that concession to go on a free
road.

MR. SAENZ: All we would be doing with this project would be
preparing for the future so that in the future we do have that
flexibility should this area continue to grow.

MR. WILLIAMSON: Well, respectfully -- and I'm prepared to support
this -- I see it a different way, I see us as preparing for the
future, putting toll lanes down the middle to get people from
Houston to Austin faster, that's what I see.

MR. SAENZ: And that's what we would be preparing for.

MR. HOUGHTON: Well, I would like to, if there's a way, Richard, to
amend. I would say we need to consider all sources of funding to
look at to supplement this pass-through financing application.

MR. SAENZ: I think we can do that.

MR. MONROE: Sure. This minute order can be amended from the dais,
that's one of the reasons we're here.

MR. HOUGHTON: I hope somebody accepts my amendment.

MR. WILLIAMSON: So you want to amend the minute order to authorize
the executive director to issue a request for competing proposals,
et cetera, to include not to exclude any proposal on the use of
concessions to offset the cost.

MR. HOUGHTON: Other forms of financing, it doesn't have to be
concession, it could be, but all forms. Tell me how you want it
worded, Amadeo, to give you the flexibility.

MR. SAENZ: I think we have the minute order as it stands right now
is to request competing proposals that would include the design,
finance, so finance is already in the minute order.

MR. HOUGHTON: But the intent of the commission that they look at all
of the available tools.

MR. SAENZ: All available financing.

MR. HOUGHTON: Right, and that could mean concessions off of 290.

MR. SAENZ: Yes, sir.

MR. HOUGHTON: Could mean.

MR. WILLIAMSON: You're going to make Bob Tesch have a coronary, he
thinks you're going to give away his project.

MR. SAENZ: We want to add to his project.

MR. WILLIAMSON: You're going to call him and tell him he gets to
build all the way out to Bastrop now.

MR. SAENZ: Yes, sir. We will take that into the minute order to be
able to add the intent of the commission that the staff consider all
forms of financing in the development of this project.

MR. HOUGHTON: Yes, sir.

MR. WILLIAMSON: As amended, Mr. Houghton moves.

MR. JOHNSON: Second.

MR. WILLIAMSON: And Mr. Johnson seconds the minute order. All those
in favor of the minute order, as amended, please say aye.

(A chorus of ayes.)

MR. WILLIAMSON: Opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Mr. Houghton.

MR. BEHRENS: Agenda item number 11 is Transportation Planning. 11(a)
would be the recommendation to appoint a new member to the Grand
Parkway Association Board of Directors. Jim?

Item 11(a), this minute order appoints a member to the Grand Parkway
Association Board of Directors. Section 15.85 of the Texas
Administrative Code states, in part, that the commission will review
an individual's application, financial statement and letters of
reference and may appoint members of the corporation's board of
directors.

Lori Quinn of Houston was originally appointed by the commission in
June of 2000 and has been nominated for a second six-year term to
the board. She has submitted the required information to the
department. Based upon review and consideration of all relevant
information, as documented and filed with the commission, and based
upon the board's recommendation, it appears the nominee is fully
eligible and qualified to serve as a member of the board.

We recommend your approval of Ms. Quinn to the Grand Parkway
Association Board of Directors with a term expiring on June 29,
2012.

MR. WILLIAMSON: Is there anybody from the Houston District here?

MR. BEHRENS: I don't think so; I don't see anybody.

MR. WILLIAMSON: I don't think there's much disagreement with the
minute order.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: Well, but I hate to do that. This is Johnny's area
and I hate to do that without Johnny in the room.

MR. HOUGHTON: Oh, he left. Sorry.

MS. ANDRADE: Well, while we're waiting, can I ask a question?

MR. WILLIAMSON: Sure.

MS. ANDRADE: Their meetings have been canceled and we haven't heard
why.

MR. RANDALL: I talked to Mr. Gornet about that, and at first they
decided to a board meeting every other month rather than every
month, and then one meeting they did not have a quorum of the board,
and I believe that was in March.

MS. ANDRADE: So they're still excited about what they're doing.

MR. RANDALL: Yes, ma'am.

MS. ANDRADE: Okay. I was worried.

MR. WILLIAMSON: I think they may be slightly disrupted by the kind
of tension right now that might exist between our department and the
Harris County Toll Authority. That's why I asked if there was
somebody from Houston. I think the tension is going to exist for a
few more months until we can kind of get settled between the
department and HCTRA about how we want to proceed, because sort of
like 121 in North Texas, no one was really interested in it for a
long time and now suddenly everyone is interested in it. It's
probably going to be a while.

Why don't we let this rest a moment, Mike, and go to 11(b).

MR. BEHRENS: That would be fine. Jim, if you'll lay out 11(b).

MR. WILLIAMSON: Because we're getting to the point where we've
either got to decide to break the record or get this puppy closed
down.

(General laughter.)

MR. BEHRENS: Jim will bring you some recommendations on the Border
Trade Advisory Committee.

MR. RANDALL: Yes, sir. Item 11(b), this minute order appoints 25
members, shown in attached Exhibit A, to the Border Trade Advisory
Committee. The purpose of the committee, created in 2001 by the 77th
Legislature, is to define and develop a strategy and make
recommendations to the commission and the governor in order to
address the highest priority border trade challenges.

Senate Bill 183, 79th Legislature 2005 amended Transportation Code
Section 201.114 by providing additional guidance to the commission
with regard to the committee's composition. The amended section
provides that the border commerce coordinator, designated under
Government Code Section 772.010, shall serve as the presiding
officer of the committee. Additionally, the committee must include
the presiding officers of the MPO Policy Board from the Pharr,
Laredo, Odessa or El Paso transportation districts, the person
serving in the capacity of executive director for each port of entry
in the state, and a representative of each from at least two
institutes or centers operated by a university in this state that
conduct continued research on transportation or trade issues.

The commission will appoint committee members to staggered
three-year terms expiring on August 31 of each year, except the
commission may establish a term shorter than three years for some
members in order to stagger the terms.

Upon your approval, the individuals or the positions named in
Exhibit A are appointed as members of the Border Trade Advisory
Committee. Staff recommends approval of this minute order.

MR. WILLIAMSON: So now, John, what's been laid out is 11(a) and
11(b) and we held off on moving on 11(a) because it's the Grand
Parkway Association. What was that person's name again?

MR. RANDALL: Lori Quinn.

MR. WILLIAMSON: I didn't want us to move forward if there was any
reason for us to be concerned about Lori Quinn.

MR. JOHNSON: She's a present member, is she not?

MR. RANDALL: Yes, sir.

MR. WILLIAMSON: Staff has explained and made a recommendation on
item 11(a).

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

Now 11(b), Jim has laid that out. Hope, I'm assuming you're okay
with all this.

MS. ANDRADE: We've got a great group here.

MR. RANDALL: They helped the commission staff with the GBE, they
helped us with that tremendously.

MS. ANDRADE: That's a great group I'm looking forward to hearing
about.

MR. WILLIAMSON: Staff has explained and made a recommendation on
item 11(b).

MR. JOHNSON: Could we, since he's not here, put Robin on this group
too?

MR. WILLIAMSON: And Tommy.

(General laughter.)

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. JOHNSON: That was not in the form of a recommendation, Mr.
Johnson was just observing.

MR. RANDALL: Thank you.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. RANDALL: Thank you.

MR. WILLIAMSON: Thank you, Jim.

MR. BEHRENS: We've taken care of agenda item number 12. Agenda item
number 13 is our State Infrastructure Bank, and this will consider a
loan to the City of Haskell for preliminary approval. James?

MR. BASS: Good afternoon again. I'm James Bass, CFO at TxDOT.

MR. WILLIAMSON: You know, James, I grew up in this part of the
country, me and Mr. Barnard. You know what we say when we pass
through this part of the state?

MR. BASS: No, sir.

MR. WILLIAMSON: Man, that was brief.

MR. BASS: Are you telling me you're going to have to recuse yourself
from this?

MR. WILLIAMSON: I'm telling you this can be a brief explanation.

MR. BASS: Item 13 seeks preliminary approval of a loan to the City
of Haskell in the amount of $500,000 to pay for water line
adjustments to US 277 and US 380. Staff recommends your approval so
that we may begin negotiations.

MR. WILLIAMSON: That is a brief recommendation.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries.

MR. BASS: Thank you.

MR. WILLIAMSON: Thank you, James.

MR. BEHRENS: Agenda item number 14 under Traffic Operations, Carlos
will bring you recommendations for the 2007 Highway Safety Plan.

MR. LOPEZ: Good afternoon, commissioners. My name is Carlos Lopez
and I'm director of the Traffic Operations Division.

The minute order before you seeks approval of the FY 2007 Highway
Safety Plan which is designed to reduce the number and severity of
traffic crashes, injuries and fatalities through enforcement,
training and education efforts. The 2007 program consists of a
budget of about $41 million that will fund 184 traffic safety
projects that cover such areas as occupant protection, selective
traffic enforcement, DWI countermeasures, and roadway safety.

We recommend approval.

MR. WILLIAMSON: Very good. Members, you heard the explanation and
recommendation.

MR. HOUGHTON: So moved.

MR. WILLIAMSON: I have a motion.

MS. ANDRADE: Second.

MR. WILLIAMSON: I have a second. All those in favor of the motion
will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Carlos.

MR. LOPEZ: Thank you, commissioners.

MR. BEHRENS: Agenda item number 15 is our Contracts for the month of
June, both Maintenance and Highway and Building Construction.
Thomas?

MR. BOHUSLAV: Good afternoon, commissioners.

MR. WILLIAMSON: Good afternoon, Thomas.

MR. BOHUSLAV: My name is Thomas Bohuslav, director of the
Construction Division.

Item 15(a)(1) is for consideration of award or rejection of highway
maintenance contracts let on June 8 and 9, 2006 whose engineers'
estimated costs are $300,000 or more. We had eleven projects,
average number of bidders was about 3.3 bidder per project. We
recommend all projects be awarded. Any questions?

MR. WILLIAMSON: Members, you heard the staff's explanation and
recommendation.

MR. JOHNSON: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. BOHUSLAV: Item 15(a)(2) is for consideration or rejection of
construction and building contracts let on June 8 and 9, 2006. We
had 106 projects, an average of about 3.3 bidders per project. We
have eleven projects recommended for rejection.

The first project is Project Number 3027 in Bell County. We had one
bidder on this project, 25 percent over, the low bid was about $2.7
million. It's for ramp work on US 190 with turn lanes on FM 3470 and
another at W.S. Young Drive. The district believes they can change
traffic control and solicit more bidders to reduce the cost.

The second project recommended for rejection is Project Number 3226,
Fort Bend County. Two bids received, 37 percent over, $389,000. This
is for a Southern Pacific Railroad depot in Richmond. On this
project we failed to deliver a proposal to a prospective bidder, and
we did find that that was the case, they requested it late, the
Wednesday before Friday letting. We had everything executed except
for the final mailing process and we didn't get their proposal, and
the proposed bidder had filed a protest that they didn't receive
their proposal, and we do have a speaker on this one, I believe,
today.

The next project recommended for rejection is Project Number 3047 in
Hays County. We had one bid on this project, 24 percent over, the
low bid was about $441,000. It's a left turn lane at Autumn Sage in
Kyle. Prices are high and we'd like to go back and solicit more
bidders and see if we can get some reduced costs.

The next project recommended for rejection is in Hill County. We had
one bid, it was 48 percent over, the low bid was about $1.7 million.
It's safety work on State Highway 22. Again, prices are high and
we'd like to go back and solicit more competition for that in hopes
of reducing costs.

The next project recommended for rejection is in Hunt County. We had
one bid on this project, it was 73 percent over, the low bid was
$279,000. This is a signal installation on State Highway 34. Again,
we'd like to go back and solicit more bidders and hopefully get
better prices from other contractors.

The next project recommended for rejection is 3055 in Kaufman
County. We had three bidders, it was 82 percent over, a low bid of
$157,000. This is safety work for left-hand lanes and overlay on
State Highway 274. We'd like to repackage this with another project,
hopefully get economy of scale and reduce the costs in that way.

The next project recommended for rejection is Project Number 3052 in
Robertson County. Two bids, 30 percent over, the low bid is $1.4
million. It's safety work including left-turn lanes at various
locations in the county. We're considering redesign for this project
for different pavement and materials to reduce the costs and
hopefully attract more bidders again.

The next project recommended for rejection is in Starr County,
Project Number 3023. One bid, 62 percent over, $13 million job,
adding a one-way pair on US 83 in the city of Roma. We're looking at
a redesign there, possibly splitting out some utility work and to
aid in getting more competition and in the process get more bidders
for the project and hopefully reduce our costs as well.

The next project recommended for rejection is in Travis County,
Project Number 3249. We had one bid, 83 percent over, low bid
$393,000. This is for a turn lane and shoulders on a Ranch to Market
3238. Prices are high, again, we'd like to go back and solicit more
competition as well and get better costs hopefully when we go back
and rebid it.

The next project is 3030 in Walker County. We had one bid, 70
percent over, $2.6 million bid for safety work on FM 230. We're
considering some redesign and relet, also to solicit additional
competition.

And the last project I have recommended for rejection is in Webb
County, Project Number 3040. We had one bid on this project, it's 15
percent over, the low bid is $2.9 million for median barriers and
bridge rail safety end treatments on IH-35. In addition to the
overrun, we left two bid items out of the project in error, and it
would add another $400,000 we'd have to address somehow and
negotiate with the contractor. We feel like if we went back and
rebid it, hopefully solicit more competition, we might get better
prices and we wouldn't have to negotiate a price for those
additional items.

Any questions?

MR. WILLIAMSON: Members, we have one witness on item 15(a)(2), Larry
Deavers. Larry? Larry, thank you for having been so patient
throughout the day. Is this the first time you've been with us?

MR. DEAVERS: Yes, sir. It's been about five years since I've been
before the commission, yes, sir.

MR. WILLIAMSON: So it's not the first time.

MR. DEAVERS: No, it's not the first time.

MR. WILLIAMSON: First time in five years.

MR. DEAVERS: First time in five years. I think it's a whole
different bunch up there. Maybe Mr. Johnson was the last time, I'm
not sure.

MR. JOHNSON: I remember your face.

MR. DEAVERS: Yes. My name is Larry Deavers and I own RDV,
Incorporated, and we're a small highway contractor in the Houston
market. We're actually in Fort Bend County, Rosenberg, Texas. This
particular project is in Fort Bend County, it's a railroad
restoration in Richmond right behind the courthouse.

For the record, I'd like to say that this job has been bid three
times. The first time was approximately August of last year. There
was a contractor that bid approximately half the estimate and didn't
move forward on the contract. The second time the contract was put
out for bid, I believe February this past year, which they got no
bids on whatsoever. This particular job was bid June 9 of last month
which we bid, we were the low bidder, $389,600, as I recall. Another
company by the name of Bass Construction Company which is a local
commercial contractor there in Rosenberg also bid on the job and
they were like about another, I think, $25,000 higher than we were.
We are a TxDOT-qualified contractor, we are prepared to enter into a
contract to do this job.

Since I'm the only contractor that's talking today, I'd kind of like
to go through the proposal process. Getting a proposal from TxDOT to
me is a two-way street. It's a two-way street in the sense that the
contractor initiates the fact that he does want a proposal, TxDOT
responds by either sending it to them or respond that they are going
to send it to them. In our particular case we usually get ours
FedExed so we make sure we got it or we have a tracking record. I
would say in the last 12 months we typically get five proposals in a
month and there's probably been three or four situations to where we
never received our proposal from Austin. It's not a common
occurrence but it does happen.

On two occasions I picked up the proposal here in Austin. Again,
back the contractor's effort to make sure he wants to bid the job.
One particular proposal I picked up an hour before we bid, we filled
it out, turned it in, and completed our bid. On the other proposal,
I needed it in Houston, it was printed in Houston, I picked it up in
Houston, brought it the next day and turned in our bid.

I guess my point to say all that is that if a contractor wants to
bid a job, he has every opportunity that's presented to him to bid
the job, but he also had an obligation to carry through and make
forth the effort to do whatever it takes to get the proposal in.

We put our number out there. We didn't bid the other two times
because a lot of these railroad depot restorations there's I'll say
non-competent contractors that bid them. You guys that are real low
that come in there and won't perform it, or you get guys that get
all types of bids. We are qualified, we do hike-and-bike trails like
you were talking about the last hour while ago. We have a slip-arm
paver run in Houston today paving hike-and-bike trails. We do bridge
work, we do all types of TxDOT work.

We ask that the job be awarded. We feel like we did everything: we
got the proposal, we got the bond, we filled out the bid form, we
got it here on time, and we put our best number on the contract, and
we ask that the job be awarded. Thank you, sir.

MR. WILLIAMSON: Wait. We're not through with you yet.

MR. DEAVERS: Oh, okay. Yes, sir?

MR. WILLIAMSON: Members, questions of this valuable vendor to the
State of Texas?

MR. JOHNSON: My question, when you came before the commission last
time, what was the matter then?

MR. DEAVERS: We were a new contractor -- I don't really want to go
down that history trail, but it was a deal on an addendum, and this
is a very similar situation. That particular month it was a job bid
here in Austin District, we bid it, our bid was not read off, and it
was a particular seal coat addendum that was like a blanket
addendum. That was just when you were initially getting online and
it supposedly went out and we never received the addendum, and I
objected not being awarded. We were actually the low bidder, we
submitted the low bid, and Abrams ended up getting the contract --
Mr. Abrams was here at the same time -- and that was what we
objected to because we never received the addendum.

I think this is a completely different situation. Like I said, we
are a responsive bidder, we probably have five or six active
contracts right now with TxDOT. I talked to the Houston District, I
talked to Mr. Gary Trietsch, the district engineer there, he is
supportive of it being awarded. Delvin Dennis, the assistant, Jim
Hunt, the area engineer, they want to get it done and they want it
done by somebody that has done contracts for them before, and I
guess that's what we're requesting. We have a good track record of
doing jobs, we have a track record of doing jobs on time.

MR. JOHNSON: I believe this is an enhancement project.

MR. DEAVERS: Yes, sir, it is.

MR. JOHNSON: Have you done other enhancement projects?

MR. DEAVERS: No, sir, we have not, but I do commercial work also, we
build apartments, we build residential construction, so we're
familiar with what it takes. We spent time and effort putting the
bid together, I have subcontractors lined up to do a lot of the
restoration type stuff, and we're just prepared to enter into a
contract, and that's all I'm asking.

MR. WILLIAMSON: What do we estimate the price to be, Thomas? This
gentleman bid $389,650.

MR. DEAVERS: Mr. Williamson, can I address that?

MR. BOHUSLAV: Thirty-six percent over, I believe.

MR. DEAVERS: Well, I would like to address that. If you go back to
the first advertisement, and I think, from my memory, the first
advertisement came out -- like the fourth advertisement -- and that
first advertisement when it first come out was within say $15,000 of
what my bid was. For some reason, when the sixth advertisement come
out, it dropped it like $100,000. So I'm not sure if anybody knows
what the estimate is.

And again, you've got a bunch of historical restoration people what
it costs to do work, and I don't think it's like pouring a square
yard of paving or laying a ton of asphalt or laying a ton of base,
nobody knows what it's going to cost. And these jobs historically --
we looked at one last year down in Dickinson, they're historically
long, drawn-out projects.

MR. JOHNSON: That's a depot also?

MR. DEAVERS: Yes, sir, that was a depot also. We didn't bid it, we
looked at it. And you know, the guy was real cheap that got it, he's
still on it 15 months later, there's no way he can possibly make any
money.

My understanding, I'm not sure about the man that made the
objection, but I understand that he's not a qualified TxDOT
contractor in the sense that this is a waive project in the sense
that you can sign up a letter or sign a statement that you can do
the work and they'll let you bid the job, but he's not financially
secure -- that's my understanding, I'm not sure that's the case, it
was my understanding, so I just want to make clear.

But you know, we're financially secure, we can do it and we can get
the bond and perform, and that's what I'm asking for.

MR. DEAVERS: One other thing I'd like to say. I've really enjoyed
it. Every contractor ought to have to come live through one of these
things, but it's been a pleasure. I don't know any of you except Mr.
Johnson, and of course Mike I've known forever and Thomas forever,
it seems like. It's really been a learning experience and it makes
contractors appreciate what you do. Thank you.

MR. WILLIAMSON: Thank you, we appreciate that.

MR. BOHUSLAV: Just a couple of comments. He made a statement about
the two bids before. These were let by the city before. Is that
right, Larry?

MR. DEAVERS: No. It was TxDOT let.

MR. BOHUSLAV: Local let?

MR. DEAVERS: It was let three times: August of last year, you let in
February and you got no bids; I think August of last year was like
maybe two or three bids and the guy that was low was like half of
what the estimate was.

MR. BOHUSLAV: Did we let it or did the city let it?

MR. DEAVERS: You let it.

MR. BOHUSLAV: The second time it was let by the city, though.

MR. DEAVERS: No. The second time it was let by TxDOT too. This is
the third time, so if you don't award it, you're going to be letting
this job four times and there's no guarantee you're going to get any
bids on it the next time.

MR. BOHUSLAV: I don't have facts on it but I'm told something
different. But he did say something that concerned me, that
contractors are not getting proposals, and this occasion we know
what happened, but what you said a while ago about your not
receiving the proposals. Are you talking about recently?

MR. DEAVERS: I'm talking about in the last 12 months.

MR. WILLIAMSON: He's talking about during the time you've been doing
it, so he's kicking dirt on your shoes.

MR. WILLIAMSON: I've loosened old Tommy up in five years. Remember
how dry he used to be? Tom Bohuslav.

(General laughter.)

MR. BOHUSLAV: The complaining contractor with the complaint, they
requested their proposal on a Wednesday, they called us and said
they had contacted us before, we have no record of that. And we keep
records there of all the requests for proposals; they do it by
phone, by fax or they can do it actually by internet. They contacted
us on a Wednesday, we were going to overnight it to them, they were
either going to get it Thursday or Friday and they had to get their
proposal in to us by one o'clock on Friday, and we found afterward
that they never got their proposal.

There are other things that we could have done to get them an
information proposal, they could have pulled one off the internet,
we could have discussed some things like that. The fact is we did
not get the proposal to them and we had an opportunity to do that.

MR. WILLIAMSON: Tom, do you think that we're at fault for the guy
not getting his proposal? I mean, Mr. Deavers makes a good point
about everybody knows what the rules are.

MR. BOHUSLAV: Well, let me say that I bear some responsibility in
that, in getting a proposal to a contractor.

MR. WILLIAMSON: Well, that's a fair answer. Thank you very much for
that. Do you think to the point that we should not move forward?

MR. BOHUSLAV: I think you have discretion in this situation to award
or not to award.

MR. WILLIAMSON: I guess what I'm asking is are you looking for us to
just look at the facts?

MR. BOHUSLAV: I provided you a recommendation of how we approach it,
but I think you have discretion in this case to decide on your own
as to what you see.

MR. WILLIAMSON: Because you know, it's a rare occurrence for us not
to do as you recommend.

MR. BOHUSLAV: We are very strict on how we handle these proceedings,
we are very strict, and I think you have to take other things into
account on how you act.

MR. WILLIAMSON: I'm prepared to think about this one, so do you want
to ask questions, Ted?

MR. HOUGHTON: The overriding question is, Tom, if we've done it
three times, we're going to do it a fourth time, there seems to be a
disconnect on this.

MR. BOHUSLAV: I will research this.

MR. WILLIAMSON: I mean, what you're telling me is it's been out
there three times and we're all about getting projects built and
getting it over with, and enhancement money.

MR. HOUGHTON: I'd like to defer it till next month where they can do
the adequate research on that issue alone.

MR. WILLIAMSON: Can we do that: defer the decision and then award it
to Mr. Deavers if we decide that things are okay?

MR. HOUGHTON: If, in fact, what is stated is true, and if, in fact,
Thomas bears --

MR. BOHUSLAV: Well, I'm wondering if you want to defer because it's
been let --

MR. WILLIAMSON: Amadeo walked up and Richard started walking off. I
think we're in trouble.

(General laughter.)

MR. SAENZ: Amadeo Saenz for the record. We can defer the contract.
This is also an enhancement project for which the overrun money
needs to come from the local entity.

MR. JOHNSON: Which is the City of Rosenberg.

MR. SAENZ: Which is the City of Richmond.

MR. DEAVERS: Amadeo, that has been approved. I talked to Mr.
Trietsch about that.

MR. SAENZ: We would need to verify. We could defer so that we can
verify all of these things and then bring it back to you next month.

MR. WILLIAMSON: John, are you okay with that?

MR. JOHNSON: Well, I knew this was an enhancement project and the
amount of the award, the enhancement money was not sufficient to
cover the entire cost, and so the locals were having a little bit of
heartburn, if you will, about that.

MR. SAENZ: Right, and that's what we would check with the city.

MR. JOHNSON: So the arrangement is that everything in excess has to
be provided by the sponsor. There's also part of the enhancement
money goes to TxDOT for administration.

MR. SAENZ: That's correct.

MR. JOHNSON: So that's taken out, so the locals are on the hook here
for a fair amount of money.

MR. SAENZ: I think we can recommend that we can defer this one and
that we can research it and get the buy-in from the city that
they're willing to cover the overruns, whatever they are, and at the
same time we can research some of the other information that was
provided by Mr. Deavers.

MR. WILLIAMSON: Mr. Deavers, do you understand why we're having this
discussion?

MR. DEAVERS: I understand.

MR. WILLIAMSON: Enhancement money is a little bit different from
gasoline tax money.

MR. DEAVERS: Yes, I understand and I confirmed that with Mr.
Trietsch yesterday that he had already talked to the locals, but you
need to confirm all that.

MR. WILLIAMSON: And Tom, I'll kind of ask you the same way I asked
Carlos, we don't want to give you the impression that we're not
accepting your recommendations.

MR. BOHUSLAV: I have no problems.

MR. WILLIAMSON: We see unusual things like this and we just ask
questions.

MR. BOHUSLAV: If we defer to next month, it will give the other
contractor with a complaint the opportunity to come and discuss it
with you as well. I just wanted to remind you and we will notify
them.

MR. WILLIAMSON: Okay. Well, I think that Mr. Johnson suggests that
he moves to approve item 15(a)(2) with the exception of the matter
concerning that contract number -- I want to cite it correctly --

MR. BOHUSLAV: 3226.

MR. WILLIAMSON: -- 3226 which we will defer action upon in the
motion.

MR. JOHNSON: Can we talk about the Calatrava Bridge? Isn't that part
of this?

MR. BOHUSLAV: Yes, sir. The Calatrava Bridge, estimated at $51
million, it came in at $113 million.

MR. JOHNSON: Did you bid on that one, Mr. Deavers?

MR. DEAVERS: No, but my former boss did.

(General laughter.)

MR. BOHUSLAV: The city is looking for ways to fund their overrun,
they primarily fund the overrun on that. They're looking for ways to
fund it and they are working on that now and they hope to have
something here by the time you meet next July. This is a conditional
award, they have to bring that money in before we can do a formal
award to the contractor.

MR. JOHNSON: So in other words, what we're approving is conditional
award depending on the city filling in the gap between the $51- and
the one whatever it was.

MR. BOHUSLAV: Yes, sir, $113 million.

MR. JOHNSON: Thank you.

MR. WILLIAMSON: Well, I'm glad you asked the question because I was
going to ask it as a matter of general reference after we presumably
passed item 15(a)(2), but I think I'll ask it now. I wouldn't
presume that the commission would do anything unusual. We've been
fairly self-disciplined on what we do with our money in the last few
years, but I know this is an important project to that city and to
that administration, and it may well be the case that we'll be asked
to help more. Is there anything in approving this that would prevent
us from doing that later on?

MR. BOHUSLAV: Say it again.

MR. WILLIAMSON: Is there any reason why approving the item as it's
written would prevent us from helping the city out with the cost of
this bridge later if the commission was so moved?

MR. BOHUSLAV: That would prevent us from approving, there's nothing.

MR. WILLIAMSON: Because I suspect they're going to get the cost down
but I think it's not going to get it down enough, and I suspect all
four of us are going to be visited -- which is okay.

MR. BOHUSLAV: In regard to the award, we have to make the award at
the full amount, and we award it at the amount and if there's
anything that occurs afterwards, we don't deal with that at this
time.

MR. WILLIAMSON: But we're not prevented from doing that. That's my
question, Amadeo. If they come to us and ask us for more help, if
we're inclined to do that in exchange for something that we need
from them, I just want to be sure we're nor preempted from doing
that.

MR. SAENZ: No, sir. We can certainly do that. We do have a letter
from the city that they are committed to coming up with the funding,
and that's why we conditionally award. If they come through and part
of the funding that they've come up with is that they've convinced
us to provide some additional, that's perfectly all right.

MR. WILLIAMSON: Well, I just think we've got a lot of things brewing
in Dallas right now and I think the NTTA 121 project is kind of
calming down where we can speak rationally with everybody, and I
think we'll have a chance to help them and they'll have a chance to
help us.

MR. SAENZ: I think we can accommodate that.

MR. WILLIAMSON: Okay. So Mr. Johnson moves 15(a)(2), amended to
defer action on the contract number Thomas previously read into the
record having to do with the enhancement project in Richmond. Mr.
Houghton seconds.

MR. HOUGHTON: Yes.

MR. WILLIAMSON: All those in favor of the motion will signify by
saying aye.

MR. WEBB: Commissioners, good afternoon. I'm Zane Webb, director of
the Maintenance Division and chairman of the Contract Claim
Committee.

The minute order you have before you approves a claim settlement for
a contract by T.D.M., Ltd. for Project STP 2003(372) in Karnes
County in the Corpus Christi District. On May 11, the Contract Claim
Committee considered this claim, made a recommendation of settlement
to the contractor, and the contractor has accepted. The committee
considers this to be a fair and reasonable settlement of the claim
and recommends approval.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you, Zane.

MR. WEBB: Thank you, sir.

MR. BEHRENS: Item number 16 concerns Building Construction. There's
four recommended minute orders; I think all of those are about the
same in explanation. You can sort of craft that and then you can
name those individual locations.

MR. WEBB: Yes, sir. If you don't mind, what I'll do is I'll make a
single explanation because all four minute orders are exactly the
same in what you're authorizing us to do, and then I'll give you
some specifics as you pass each one, if that's all right.

MR. WILLIAMSON: Yes, sir.

MR. WEBB: You're authorizing us, under this minute order, to issue a
request for qualifications and proposals to rank, select, negotiate
a development and exchange agreement with a firm for the design and
construction of a new facility on state-owned property in exchange
for existing properties.

In a kind of straightforward explanation of what we're doing, we've
got some properties that have been surrounded by commercial
properties or schools and we've already bought property in other
locations, we simply don't have the capital funds to put buildings
on those properties. What we'd like to do is enter into a
private-public cooperation to leverage the capital funds that we've
got through trading the properties that we're on for buildings on
the new properties. In some cases we'll come out of it whole, we
think, in that we will get enough money out of the existing
properties to complete a building, in other cases we may not quite
get there, and we may have to supplement the building of that
building with some of our capital funds.

MR. JOHNSON: Why are we considering this? I mean, it looks like
these are in the Waco District and in the Dallas District, two in
each.

MR. WEBB: Yes, sir.

MR. JOHNSON: We have a process that we're reviewing all of our area
maintenance offices and trying to update them, and why these in
particular? Are they outdated, are they too small? What's the cause
of this?

MR. WEBB: Yes, sir. The answer is yes. We've already done a review
of all the properties that you're talking about, they do need to be
replaced, and that's why we've already purchased property there. We
simply haven't had the capital funds in the past to build those
buildings yet. What this does is give us the ability to leverage
what capital funds we've got with private money for those existing
properties to go ahead and make the move now rather than waiting
several bienniums for the capital to come in.

MR. JOHNSON: Do you foresee that we're going to have sort of a
stream of these past these four?

MR. WEBB: Yes, sir, I do. I think if the administration agrees,
we'll probably have a couple more next month, and I think you're
going to get a few, and then as time goes on and we develop those
and see how things go, then you're probably going to get some more.

If there aren't any questions, I'll go directly to the specifics of
each one. Item 16(a) is three properties we own: a Belton office on
the southeast side of the city of Belton is an area office; on the
north side of Temple on I-35 we have a maintenance office; and over
at Killeen near Fort Hood we have another maintenance office. We'd
like to send out an RFP to trade all three of those properties for
improvements on a piece of property that we own by the Expo Center
in northwest Belton.

MR. JOHNSON: So are we consolidating three maintenance offices into
one location?

MR. WEBB: That was already done, Commissioners, substantially. We
still have a few people in the Temple office; it was an area
engineer and maintenance office; we've only got a few people that
work on signal controllers. In the Killeen office it has gone from a
full maintenance section down to a subsection. So a lot of that
consolidation has already taken place over at the Belton office.

MR. HOUGHTON: So we're taking an asset, selling it and rolling it
into construction or expansion of a new facility.

MR. WILLIAMSON: I have a motion and a second on 16(a). All in favor
of the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Thank you. Motion carries. Item 16(b)?

MR. WEBB: Thank you, sir. We want to relocate the Grand Prairie
maintenance staff with the area engineer in Dallas at the Greenville
area office. We have a piece of property at Cedar Hill already
purchased and we'd like to take the property in Grand Prairie and
trade it for some improvements on the Cedar Hill property. Staff
recommends approval.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. WEBB: Item 16(c), at the Waco area office, the existing office
on State Highway 6 on the west side of Waco, that property is
surrounded by commercial property. We also have a site that we've
purchased on the loop on the southeast side of Waco, and we would
like to move that area office by exchanging the property on Highway
6 for improvements on the property on the loop that we already have.
Staff recommends approval.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. Thank you.

MR. WEBB: Item 16(d), we've proposed to relocate the area engineer
from the district headquarters now in Dallas, along with the
Rockwall maintenance section to a site that we presently own in
Garland, Texas. Staff recommends approval.

MR. HOUGHTON: So moved.

MR. JOHNSON: Second.

MR. WILLIAMSON: We have a motion and a second. All those in favor of
the motion will signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Item 16(d) carries.

MR. WEBB: Thank you, sir.

MR. WILLIAMSON: Thank you.

MR. BEHRENS: Agenda item number 17 is our Routine Minute Orders.
They've all been duly posted as required. I would like to bring your
attention to 17(a)(4) which is a donation connected with our Vehicle
Titles and Registration Division. We have some people here from
State Farm, and I'll ask Rebecca to present them and introduce them
and maybe a little explanation of this particular minute order.

MS. DAVIO: Okay, great. Commissioners, we are here today to ask for
your permission to accept a donation from State Farm Insurance
Company. This donation is in support of the "Put Texas in your
corner" campaign. As you probably are aware, the "Put Texas in your
corner" campaign is a positive educational campaign that encourages
folks to register their vehicles on time, and as you also know,
registering vehicles on time yields money to reduce congestion and
to increase economic development, to improve air quality, to
increase safety, and so we're excited about this campaign.

We're also excited about this campaign because it's had a number of
successes in its short tenure. The contract was only signed last
March, a year ago March with Think Street, a company that has
demonstrated a lot of creativity, and we have had a lot of success
on this. One of the first successes is that we've had a five-to-one
return on investment on our radio advertising dollars. They created
a very creative campaign, very creative ads that generated a lot of
interest that also got a lot of air play.

Then we came back with another success to win awards for these
creative campaigns. We have won seven American Association of Motor
Vehicle Administration awards, and that includes regional awards and
international awards for the radio, and the TV commercials and the
brochures that have been produced for that. We also have recently
won eight Telly Awards for those broadcast commercials.

This campaign is targeted at new Texans and at 18- to 34-year-olds
which research has demonstrated are non-compliers, and we're happy
to report that another success is a very high level of awareness,
particularly for a new campaign. The overall awareness of the
message, "Put Texas in your corner/Check the Date, Love Your State"
was at 16 percent, and at 32 percent in the target market of 18- to
34-year-olds.

The last success that we're excited about is that of partnerships
and that's why Mr. Ronnie Lee Vandivier is here. He's the Texas Zone
marketing manager, and he is here today to tell you just briefly a
little bit about what State Farm is willing to do to participate to
support the "Put Texas in your corner" campaign.

MR. WILLIAMSON: We are glad you're here, we're glad you stuck with
us. We thought that row was a bunch of interns back there.

MR. VANDIVIER: Bless you. I look like an intern. Thank you. It's a
pleasure to be here this afternoon, and I did get to see Texas
government at work. I am not a native Texan but I got here as fast
as I could, and I'm very impressed how you all have handled this
today.

We were surprised when we were approached. We thought that a project
of this magnitude would have been taken over by someone else. We
find it very important for us as an insurance company to make sure
that we have safe vehicles on the highway, and the way you are doing
it in this state, it lends help to support us.

Our other initiative, too, of course, is we want to keep our name in
front of young drivers and that's who you're targeting. That's very
beneficial. We look at this as similar to "Don't Mess With Texas"
which has now been used in other states in a lot of different ways,
and we believe that Texans will embrace the campaign wholeheartedly.

We have 1,400 agents and with agents and staff and employees, it's
almost 10,000 people. We're going to roll the program out to them
and encourage them to do the same. I was in front of our executive
office and we will be putting the Texas Pride decals on all company
vehicles which is about 200 to 300 vehicles.

So we're very much behind the program and we just would like to work
with the Department of Transportation any way we can.

MR. WILLIAMSON: We're so happy to hear you say that and we
appreciate your kind words. Where did you get to Texas from?

MR. VANDIVIER: I may be in the witness protection program. I was
born in Kentucky, I lived in Illinois, I lived in Iowa, now I'm in
Texas.

MR. WILLIAMSON: Well, we're glad you're here and we hope you stay.

MR. VANDIVIER: I would like to.

MR. WILLIAMSON: We need all the Texans we can get.

MR. VANDIVIER: Thank you for your support.

MR. HOUGHTON: Thank you very much to State Farm.

MR. WILLIAMSON: We really do appreciate it, and thank you for being
so patient today.

MR. VANDIVIER: I learned a lot.

MR. BEHRENS: And commissioners, I think you'll notice that that will
be an in-kind donation of about $1.5 million.

MS. DAVIO: Yes. Thank you.

MR. WILLIAMSON: We appreciate it a lot.

MS. DAVIO: It's a very successful campaign.

MR. HOUGHTON: Do you need to know how to spell my name?

MR. JOHNSON: Small, unmarked bills.

(General laughter.)

MR. WILLIAMSON: Thank you, sir. Good to see you.

MS. DAVIO: Request your approval of the minute order.

MR. BEHRENS: With that, commissioners, I would move to approve that
minute order as well as the other routine minute orders that are
before you.

MS. ANDRADE: So moved.

MR. HOUGHTON: Second.

MR. WILLIAMSON: I have a motion and a second. All those in favor of
the motion, signify by saying aye.

(A chorus of ayes.)

MR. WILLIAMSON: All opposed, no.

(No response.)

MR. WILLIAMSON: Motion carries. That's it, Mike?

MR. BEHRENS: That is it.

MR. WILLIAMSON: Richard, to your knowledge do we have any reason to
go into executive session?

MR. HOUGHTON: Wait a minute. We've got half an hour to get the mayor
back here to sing.

MR. WILLIAMSON: Half an hour we can break the record.

MR. HOUGHTON: That's my point.

MR. WILLIAMSON: You know, we've already said it, and everybody is
gone, Richard, but sincerely, we will miss you. We wish you the best
on your retirement, and lots of fun and all of that.

(General talking and laughter.)

MR. WILLIAMSON: Don't be a stranger, come see us.

The most privileged motion.

MR. HOUGHTON: Move to adjourn.

MR. JOHNSON: I second.

MR. WILLIAMSON: I have a motion and a second to adjourn. All those
in favor of the motion will signify by saying aye.